Preamble

The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.

PRIVATE BUSINESS.

Brighton and Hove Gas Bill,

As amended, considered.

Ordered, That Standing Orders 223 and 243 be suspended, and that the Bill be now read the Third time.—[The Chairman of Ways and Means.]

Bill accordingly read the Third time, and passed.

Folkestone Corporation Bill [Lords],

As amended, considered; to be read the Third time.

Southend-on-Sea Gas Bill,

As amended, considered.

Ordered, That Standing Orders 223 and 243 be suspended, and that the Bill be now read the Third time.—[The Chairman of Ways and Means.]

Bill accordingly read the Third time, and passed.

Yeovil Corporation Bill,

As amended, considered.

Ordered, That Standing Orders 223 and 243 be suspended, and that the Bill be now read the Third time.—[The Chairman of Ways and Means.]

Bill accordingly read the Third time, and passed.

Oral Answers to Questions — INDIA.

PUNJAB DISTURBANCES.

ARMY COUNCIL AND GENERAL DYER.

STATEMENT BY MR. CHURCHILL.

10. Sir W. JOYNSON-HICKS: asked the Secretary of State for India whether he will publish the Report of Major
Briggs, brigade-major to General Dyer, which was refused publication by the Hunter Committee, owing to the death of writer.

The SECRETARY of STATE for INDIA (Mr. Montagu): The document referred to was not admitted as evidence by Lord Hunter's Committee, and has never been communicated to me officially. I learn through my right hon. Friend the Secretary of State for War that it is appended to the statement submitted by General Dyer to the Army Council, and will be published by him with that statement.

Mr. GWYNNE: May I ask when that Statement will be published?

Mr. MONTAGU: I think that question ought to be addressed to the Secretary of State for War.

Colonel YATE: Shall we have that statement before the Debate to-morrow?

Mr. MONTAGU: With regard to that also, perhaps the hon. and gallant Member would address his question to the Secretary of State for War.

14. Commander Viscount CURZON: asked the Secretary of State for India whether all witnesses, including General Dyer, called before the Hunter Committee were given an opportunity of correcting the report of their evidence, or whether only certain witnesses were accorded this privilege?

Mr. MONTAGU: I understand that witnesses who remained accessible were generally given an opportunity of correcting their evidence. I believe that General Dyer returned to his brigade on the Frontier very shortly after giving evidence. Besides his oral evidence, he submitted a written statement, which is published in Volume 3 of the evidence.

Viscount CURZON: I could not hear everything that the right hon. Gentleman said. Could he state whether General Dyer was given an opportunity of correcting his evidence or not?

Mr. MONTAGU: I really do not know, but I understand that General Dyer did not correct his evidence.

Mr. GWYNNE: May I ask why other witnesses were allowed to correct their evidence, and General Dyer was not? Is
the right hon. Gentleman aware that many of the other witnesses, when their evidence was submitted to them, had to make a great many corrections, as the shorthand notes had been taken by an Indian shorthand writer?

Mr. MONTAGU: No, Sir. I am not aware of that. The fact that General Dyer did not correct his evidence ought certainly to be taken into account in appraising it. I understand that the reason why General Dyer did not correct his evidence was because of his duties on the Frontier at the time, and I hope the House will take that into account.

Mr. BOTTOMLEY: Had he an opportunity of doing so?

Mr. MONTAGU: I was not a member of the Committee. The Hunter Commitee sat in India. They gave, I suppose, the usual opportunities to any witnesses who desired to correct their evidence. There was a very good reason why General Dyer did not do that: he was on service, and I have asked the House to take that into consideration in weighing the evidence.

Mr. GWYNNE: Did the right hon. Gentleman take that into consideration himself when he wrote his dispatch?

Mr. MONTAGU: I shall be prepared to justify the dispatch in the Debate to-morrow.

Mr. BILLING: Does General Dyer accept the accuracy of his own evidence which is now presented to him, or does he differ from it?

Mr. MONTAGU: I do not know. The further statement of General Dyer to the Army Council will, I understand, be published.

Mr. BILLING: Will General Dyer be given an opportunity of reading his evidence, and stating what corrections—had he had an opportunity of correcting it—he would have made?

Mr. MONTAGU: The evidence has been published now for some time. I imagine that in his statement to the Army Council he has made any observations he wishes to make.

Sir W. JOYNSON-HICKS (by Private Notice): asked the Secretary of State for War whether he is in a position to
announce to the House the decision of the Army Council in reference to Brigadier-General Dyer, and if and when, it is proposed to publish Brigadier-General Dyer's statement?

The SECRETARY of STATE for WAR (Mr. Churchill): I am about to lay a Paper on the Table in dummy which will, I hope, enable hon. Members to be in possession of Brigadier-General Dyer's statement in time for the Debate tomorrow. Everything will be done to expedite it.
With regard to the decision of the Army Council, they have come to the following conclusion: The Army Council have considered the Report of the Hunter Committee, together with the statement which Brigadier-General Dyer has by their direction submitted to them. They consider that, in spite of the great difficulties of the position in which this officer found himself on 13th April, 1919, at Jallianwallah Bagh, he cannot be acquitted of an error of judgment. They observe that the Commander-in-Chief in India has removed Brigadier-General Dyer from his employment in India and that he has been informed that no further employment will be offered to him in India and that he has in consequence reverted to half-pay, and that the Selection Board in India has passed him over for promotion. These decisions the Army Council accept. They do not consider that further employment should be offered to Brigadier-General Dyer outside India—

HON. MEMBERS: "Why," and "Shame!"

Mr. CHURCHILL: That is very improper and disorderly.

HON. MEMBERS: "Why!"

Mr. CHURCHILL: It is well known to be disorderly. They have also considered whether any further action of a disciplinary nature is required, and the Army Council, in view of all the circumstances, do not feel called upon from the military point of view, with which alone they are concerned, to take any further action.

Sir W. JOYNSON-HICKS: Is the right hon. Gentleman prepared to endorse the action of the Army Council and, is he prepared to defend it here to-morrow?

Mr. CHURCHILL: Certainly.

Lieut.-Colonel CROFT: Is it not the fact that General Dyer after these events happened was employed to take part in operations in Afghanistan?

Mr. SPEAKER: The hon. and gallant Gentleman is asking a question which has been asked before, and answered.

Commander BELLAIRS: Will hon. Members be precluded from moving the adjournment of the House with regard to the War Office decision at a later stage, in view of the fact that the discussion to-morrow is on the India Office Vote?

Mr. SPEAKER: I can only answer in the well-known Parliamentary phrase, "Wait and see."

PUNJAB DISTURBANCES.

5. Sir W. JOYNSON-HICKS: asked the Secretary of State for India how many appeals have been preferred to the Privy Council by persons convicted of rebellion, murder, and other serious offences during the Punjab disturbances of April, 1919; what has been the result of the appeals which have been heard; and what steps he is taking to defend the remaining appeals?

Mr. MONTAGU: There have been six appeals, of 52 persons. One appeal, of 21 persons, has been heard and dismissed. The remaining five are pending. If proceeded with, counsel of standing will be retained to defend them in accordance with the usual practice. My right hon. Friend the Attorney-General was one of those who acted in this behalf in the appeal which was dismissed.

Sir W. JOYNSON-HICKS: May I ask what is the position of the appeals? Are they going to be proceeded with or not?

Mr. MONTAGU: That depends upon the appellants. My legal advisers have, I think, pressed that the appeals should be proceeded with or abandoned.

6. Sir W. JOYNSON-HICKS: asked the Secretary of State for India whether Dr. Mohammed Bushir, of Amritsar, was convicted by a martial law commission for having led the mob at the attack on the national bank when Messrs. Stewart and Scott were murdered; whether he was sentenced to death; if so, on what grounds this man was subsequently pardoned by the Government of India; and whether his appeal to the Privy
Council was still pending at the time he was so pardoned?

13. Colonel YATE: asked the Secretary of State for India by whose orders Muhammed Bashir, who led the attack on the National Bank at Amritsar when Messrs. Stewart and Scott were murdered, and also organised the gathering at Jallianwala Bagh, and who was convicted and sentenced to death by a martial law commission consisting of three judges, one of whom was a British High Court Judge and another an Indian Judge, was subsequently unconditionally released; whether this release was the result of the review of unexpired sentences by the two High Court Judges; if so, did both these judges concur in the recommendation for release or were their opinions divided; and, in the latter case, what was the special reason that induced the Government of India to override the opinions of four out of the five judges who dealt with the case?

Mr. MONTAGU: Dr. Muhammed Bashir was sentenced to death by a martial law commission in the Amritsar Leaders' case, which included the charge against him of inciting the mob in the attack on the National Bank. The sentence was reduced by Sir Edward Maclagan, Lieutenant-Governor of the Punjab, to one of six years' rigorous imprisonment. The two High Court Judges appointed to examine cases tried by Martial Law Courts agreed that the part of the case against the doctor relating to the events at the National Bank rested on the, uncorroborated testimony of an approver; one judge was of the opinion that there was sufficient evidence to justify a conviction for waging war only, but the other judge would not admit the sufficiency of the evidence to justify a conviction at all. The Punjab Government, in the circumstances, recommended the release of Dr. Muhammed Bashir on certain conditions, and the Government of India accepted these recommendations. The answer to the last part of the question is in the affirmative.

Sir W. JOYNSON-HICKS: Can the right hon. Gentleman say what the conditions were, whether they have been fulfilled, and whether this gentleman, who was convicted, sentenced to death, and let out, is the leader of an agitation in the Punjab against this country?

Mr. MONTAGU: The conditions were: (1) that during the remaining term of the sentence he would not commit or abet the commission of an offence against the State or public tranquillity; (2) that during the same period he would not, directly or indirectly, take part in any movement directed against the State or public tranquillity, or likely to lead to the commission of any offence of the nature described above. If any of these conditions be not, in the opinion of the Local Government, fulfilled, the Local Government may cancel the suspension of the sentence. The hon. Member will perceive that, under the terms of the conditions, the Local Government have full discretion to act, and I would prefer to leave it to the Local Government to act.

Colonel YATE: Was it the Lieutenant-Governor of the Punjab who released this man, or the Viceroy and the Government of India?

Mr. MONTAGU: If the hon. and gallant Gentleman had heard my answer, he would have noted that the Punjab Government, in the circumstances, recommended his release on certain conditions, and that the Government of India accepted the recommendation.

Colonel YATE: Do the Government of India think it right to go against four judges, and is it likely to uphold the justiciary of India when four judges out of five condemn a man and the Government of India order his release?

15. Mr. GWYNNE: asked the Secretary of State for India if, when he first heard of the occurrences at Amritsar in April, 1919, he thought it a matter for immediate inquiry; and, if so, why he did not arrange for the Commission to commence proceedings before 29th October?

Mr. MONTAGU: As I stated in this House on the 22nd May, 1919, the Viceroy had always contemplated an inquiry, and in the first week of that month he intimated this fact to me. I said, however, on the same date, "Let us talk of an inquiry when we have put the fire out." Any subsequent delay was due to climatic conditions and to the obvious difficulties in selecting and arranging for such a Committee.

Mr. GWYNNE: Will the right hon. Gentleman say on what date he considered the fire to be put out?

Mr. MONTAGU: I would not like to say that accurately in answer to a supplementary question, but I would suggest to the hon. Member that it was certainly not before martial law.

Mr. GWYNNE: Does the right hon. Gentleman suggest that it was reasonable, taking into consideration all that he has said, to wait from April until the end of October before proceedings were started?

Mr. MONTAGU: I understand that that is one of the charges which the hon. Member will make in the Debate. You cannot hold an inquiry of this kind in the Punjab during the hot weather, and you cannot ask people to serve on an inquiry the date of which has not yet been fixed.

Mr. GWYNNE: rose—

Mr. SPEAKER: The hon. Member had better wait until to-morrow. He is in danger of spoiling his case by this preliminary canter.

16. Mr. GWYNNE: asked the Secretary of State for India whether it is his intention to publish the evidence of all the witnesses examined by the Hunter Committee, or whether he expects the House of Commons to form an opinion on extracts from the evidence of a few witnesses, as set forth in the Blue Book Cmd. 681.

Mr. MONTAGU: The evidence of witnesses examined by the Hunter Committee has been published and is on sale, except that of three witnesses heard in camerâ. Members were informed, on a slip attached to the Report, which has been distributed, that volumes of evidence would be supplied on application to the India Office.

Mr. GWYNNE: Is the right hon. Gentleman aware that I have applied twice in the Vote Office for a copy of the evidence, and have been unable to get one?

Mr. MONTAGU: Nobody can regret more than I do the misfortunes of the hon. Member. I will see that he gets a copy of the evidence this afternoon.

Mr. GWYNNE: Does not the right hon. Gentleman think it is very important that we should all have it? Is it not
usual for hon. Members to be able to get evidence of all important Commissions and inquiries in this House?

Colonel WEDGWOOD: Will the right hon. Gentleman let me have a copy too?

Mr. MONTAGU: There are, I think, five volumes. If I printed and distributed them all to every hon. Member, I should be accused of unnecessary expenditure. If the hon. Member has found any difficulty in getting the evidence it is rather remarkable that he should have waited till the day before the Debate is to take place.

Mr. GWYNNE: The right hon. Gentleman must know that it is usual to send round such evidence.

17. Mr. GWYNNE: asked the Secretary of State for India at what date, and through what source, he eventually became aware of the details of the occurrences at Amritsar?

Mr. MONTAGU: Brigadier-General Dyer's own Reports were first received at the India Office in January, 1920, and the Committee's Report at the end of March. Earlier official reports had not given the details in question. It was in the previous December that I read a newspaper cablegram regarding what Brigadier-General Dyer had said in evidence.

Mr. GWYNNE: Will the right hon. Gentleman kindly answer my question, which was, from what source he eventually kept himself informed as to the details of the occurrence?

Mr. MONTAGU: Perhaps the hon. Member will be good enough to study carefully the printed report of the answer which I have just read to the House.

Colonel YATE: Can the right hon. Gentleman explain why the Government of India did not send home General Dyer's Report?

Mr. SPEAKER: That does not arise out of the question.

INDIA.

OFFICERS' PENSIONS.

1. Colonel BURN: asked the Secretary of State for India why the revised scale
of pensions for officers of the Indian Army laid down in the Memorandum circulated by the India Office is applicable only to those officers who served in paid military posts during the Great War; and why are those officers ineligible who served throughout the War in the Censor's Department and such like positions, giving their entire time to the service of their country, and who were debarred from serving in a theatre of war owing to age or some infirmity.

Mr. MONTAGU: The restriction of the revised scale of pensions to Indian Army officers who rendered paid military service during the Great War is in accordance with the rule laid down in the Royal Warrant of 13th September, 1919, regarding the revision of the rates of retired pay for officers of the British Service.

Colonel BURN: Does not the right hon. Gentleman think it is very unfair to these officers who are debarred from participating in the increase in pension, and who served in very dull posts during the War, and were equally doing service to the country?

Mr. MONTAGU: I think all these rules must necessitate hard cases, but I do not think I could apply to officers in the Indian Army a different rule from that which the War Office applies to officers in the British Army.

LIEUTENANT-COLONELS (PAY).

2. Colonel YATE: asked the Secretary of State for India if he can now state whether the reply has been received from the Government of India on the subject of their refusal to permit lieutenant-colonels of the Indian Army on the unemployed list residing in India to draw the pay of their rank; and whether the deductions illegally made from their pay have been refunded?

Mr. MONTAGU: I have decided that these officers shall receive the new pay of rank. The Government of India have been requested to make any necessary adjustments.

CONNAUGHT RANGERS.

9. Sir J. D. REES: asked the Secretary of State for India whether he can give the House any information regarding recent occurrences in the Connaught Rangers?

Mr. MONTAGU: Since the communiqué issued to the Press on the 4th instant, the only information I have received from the Government of India is to the effect that down to the 4th July nothing further of any importance had occurred.

ROYAL NAVY.

COASTGUARDS (LEAVE).

18. Viscount CURZON: asked the First Lord of the Admiralty whether coastguard captains and officers and men serving under their orders are granted 42 days' leave per annum; whether divisional officers are limited to 30 days' leave per annum; if so, what is the reason for this difference; and is it proposed to continue it?

The PARLIAMENTARY SECRETARY to the ADMIRALTY (Colonel Sir James Craig): Under the organisation recently introduced for Home commands, officers commanding areas and captains on the staffs of Commanders-in-Chief for Coastguard duties, and the officers and men borne for duty with them, are no longer solely in the position of officers and men of the Coastguard. They are, therefore, eligible for leave under the ordinary Naval Regulations for officers and men serving on Home stations, which permit of leave up to 42 days a year being granted. Divisional officers remain as before solely officers of the Coastguard and continue therefore under the special leave Regulations laid down for the Coastguard, which permit of leave up to 30 days a year being granted. No change is proposed in the scale of leave laid down for the Coastguard. I may observe that the distinction between the leave granted to that Force and that granted to the Naval Service generally on Home stations is one of very long standing and is accounted for by the different conditions of service.

Viscount CURZON: Will the hon. Baronet not consider in future putting all officers in the Coastguard on the same footing as far as leave is concerned?

Sir J. CRAIG: No, I am afraid not. The conditions of the service prevent it.

FIELD ALLOWANCE (INTERNED OFFICERS AND RATINGS).

21. Viscount CURZON: asked the First Lord of the Admiralty whether naval
officers and ratings interned in neutral countries during the War are entitled to field allowance during the period of internment if entitled to the same before internment?

Sir J. CRAIG: The answer is in the negative. I may, however, explain that naval officers received a payment to meet food expenses within a maximum of 5s a day, which was increased to 7s. 6d. a day after 1st January, 1918. I understand that Army officers received no food allowance, but continued to be paid the field, lodging, fuel and light allowances of which they were in receipt at the date of capture. These allowances approximate, in the generality of cases, to the food allowance paid to naval officers, and equality of treatment between the two services has thus been secured so far as practicable.

RUSSIA.

BRITISH NAVAL MISSION.

20. Lieut.-Commander KENWORTHY: asked the First Lord of the Admiralty whether the British Naval Mission recently with General Wrangel have been withdrawn; if not, what is the reason for the delay; and whether any Allied Naval Mission is accredited to General Wrangel?

The FIRST LORD of the ADMIRALTY (Mr. Long): The British Naval Mission is now being withdrawn; there is no delay. With regard to the last part of the question, it is believed that America and France have naval representatives attached to the Russian forces.

Lieut. - Commander KENWORTHY: What does the right hon. Gentleman mean by "it is believed"? Surely we can be informed whether our Allies have sent a naval mission to General Wrangel.

Mr. LONG: I have given the House all the information in my possession.

Colonel WEDGWOOD: From whom do we get information as to General Wrangel now? Is it sent by General Wrangel's officers now in England, or is it sent by wireless?

Mr. LONG: I really could not say without notice. A variety of information comes from more than one source. If the hon. and gallant Gentleman wants
to know the sources from which it all comes, I should have to inquire.

FOREIGN SECURITIES.

66. Mr. C. WHITE: asked the Lord Privy Seal whether the negotiations for the resumption of trade between Russia and this country will be broken off if the Soviet Government refuses to recognise foreign securities held in Russian enterprises incorporated under Russian law?

Mr. BONAR LAW (Leader of the House): As I stated in answer to a previous question, I do not think it would be right to deal with this subject except as a whole.

LABOUR DEPUTATION (REPORTS).

69. Lieut.-Colonel Sir F. HALL: asked the Lord Privy Sea whether the Government have considered the Report made by members of the Labour deputation to Russia on their return to this country of the methods of terrorism established in Russia by the present régime; and if, in view of this unbiased evidence as to the suppression of popular government and individual freedom under Soviet rule, negotiations with the Russian delegates will be renewed pending an independent Investigation by Allied representatives of the commercial and political conditions obtaining in Russia?

Mr. BONAR LAW: Yes, Sir; I have read some of the Reports referred to, but the members do not seem to have been unanimous in their conclusions, and there is nothing in these Reports which calls for any alteration in our policy.

Sir F. HALL: May I ask my right hon. Friend whether the Government intend to get into touch with the Russian Government to see whether they will allow an Allied Commission of Inquiry into Russia, with a free hand to make a Report as to the present condition of affairs in Russia?

Mr. BONAR LAW: That does not arise out of the question.

Sir F. HALL: Will the Government consider the matter? With all deference, it does arise out of the question.

BRITISH INTERVENTION (COST).

82. Mr. LUNN: asked the Secretary of State for War by what date the state-
ment of the cost of British intervention in Russia up to 31st March will be published; and which are the Departments that have not yet sent in their statements of cost?

Mr. CHURCHILL: The return is now on the point of completion, and will, I hope, be in the hands of Members in the course of a few days.

AEROPLANE FLIGHT, KIEFF.

83. Lieut.-Commander KENWORTHY: asked the Secretary of State for War whether General Carton de Wiart obtained possession from the War Office to take part in the demonstration flight to Kieff in a Bristol aeroplane on behalf of a Polish syndicate; and whether it is considered part of General Wiart's duties to take part in demonstrations of this kind?

Mr. CHURCHILL: The answer to both parts of the question is in the negative. There is no objection to a British officer taking an aeroplane flight; in fact, although not forming part of his duties, the interest displayed by General Carton de Wiart in the enterprise appears commendable.

Lieut.- Commander KENWORTHY: May I ask whether this flight was not made to advertise this Polish syndicate; is this syndicate a commercial venture, and if that is the case is it not rather improper for a British General to do such a thing?

Mr. CHURCHILL: No. Consideration of the circumstances has led me to the conclusion which I have already conveyed to the hon. and gallant Member.

NORTH RUSSIA (BRITISH WITHDRAWAL).

Mr. LAMBERT (by Private Notice): asked the Secretary of State for War whether it is not a fact that on the 12th September last, in a statement published over his name in the newspapers, he undertook that when the operations connected with the withdrawal from North Russia were completed, a full statement would be laid before Parliament as a Parliamentary Paper, and, if so, whether he does not think that the time has come for him to carry out his undertaking?

Mr. CHURCHILL: Yes, Sir. I shall be quite ready to take that course. I had prepared last autumn, what is called
a Blue Book, which would give the House a considerable amount of information about the whole of the operations and negotiations connected with the withdrawal from North Russia, but once the troops were safely out there seemed to be such a total lack of public interest in those events and in that theatre that I did not feel it necessary to trouble the House with it. As now, however, there appears to be in some quarters a certain revival of interest, I think it would be very appropriate if I laid this Blue Book.

Mr. LAMBERT: As interest has been quickened in this matter, when may this publication be expected?

Mr. CHURCHILL: I see no reason why it should not take place some time next week.

Captain WEDGWOOD BENN: Will the right hon. Gentleman include a clear statement as to which of the statements by General Golovin are challenged as being inaccurate?

Mr. CHURCHILL: I do not think I will forecast at this stage the form which the Blue Book will take, but I hope it will be found to put the House fully in possession of the means of forming a judgment, so far as any further judgment is required.

Colonel WEDGWOOD: Will the White Paper include the statement made by General Ironsides, which was suppressed?

Mr. CHURCHILL: I must entrench myself behind Mr. Speaker's latest ruling. My hon. and gallant Friend must wait and see.

Mr. MILLS: Can the right hon. Gentleman enlighten the House as to the reported surrender of Poland to the Soviet forces?

Mr. CHURCHILL: I have no information on the subject, but I do not think any statement of that kind can be true.

Mr. SHORT: When this Blue Book is placed before us, will the Leader of the House afford an opportunity to the House to discuss it?

Mr. BONAR LAW: I think it will be wise for the hon. Member to wait—[HON. MEMBERS: "Wait and see!"]—and see the Blue Book first.

EX-SERVICE MEN.

EMPLOYMENT.

23. Mr. WATERSON: asked the Minister of Labour if he can state the number of ex-service men who have been refused employment by the employers who engaged them at the time of their joining the colours?

The MINISTER of LABOUR (Dr. Macnamara): I cannot give the number of such cases, but I have no reason to suppose that it is at all considerable. The fact that something like 5,250,000 of ex-service men have been re-absorbed in industry is, I think, an indication of the extent to which employers must have fulfilled their obligations towards their former employés who joined the Colours. At the same time, there are 180,801 ex-service men still registered with the employment exchanges as unemployed, and 14,897 officers and other ranks of similar educational qualifications registered with the Appointments Department as requiring employment. And to these numbers must be added those out of employment but not on our books. I can assure my hon. Friend that my Department is doing all it can to still further reduce these figures.

Mr. HAILWOOD: Will the right hon. Gentleman state the number of ex-service men who are unable to obtain employment through trade union regulations?

Dr. MACNAMARA: I have said before that great trouble has been experienced in this matter, but increasing numbers are being employed.

Sir M. DOCKRELL: Why has there not been a King's Roll of Honour in Ireland similar to that in this country of those employers who honourably keep their engagements?

Dr. MACNAMARA: The hon. Gentleman is under a misapprehension. The roll of honour is for employers who will undertake to employ as many disabled men as possible.

Sir M. DOCKRELL: The right hon. Gentleman must be aware—

Mr. SPEAKER: The hon. Gentleman is making a statement.

BOOT AND SHOE INDUSTRY.

24. Mr. WATERSON: asked the Minister of Labour how many men are in training
under Government schemes for the boot and shoe industry; and, in view of the fact that many men in the industry find themselves unemployed already, what hope does he hold out to these men now in training to get their livelihood when their training is completed?

Dr. MACNAMARA: About 1,500 men are now training in the boot and shoe industry, of whom the great majority are engaged in hand-sewn boot and shoe making and repairing, for which openings still exist, especially in rural districts. Very few are engaged in the machine branch of the trade, where there is a certain amount of unemployment. Precaution, so far as is possible, for employment on the completion of training is taken by the regulation of admittance to the trade by local committees, representing employers and employed, who limit the number accepted to the probable absorptive capacity of the district and also assist in finding vacancies after training.

Mr. WATERSON: Is the right hon. Gentleman aware that as far as hand-sewn boots are made in this country there is a slump of unemployment and that many men in villages who previously got their living at it now find themselves only working one day per week?

Dr. MACNAMARA: I am not aware of that. I said there is unemployment in the machine part of the trade, but if it is a fact that there is also unemployment in the case of hand-sewn boots, all the more credit to the boot and shoe trade, who have helped us so much in training these men. There are 1,500 now in training and they have trained already something like 4,000.

Mr. WATERSON: Will the right hon Gentleman reply to the second part of my question? What hope is there of these men getting employment seeing that there is a great slump?

Mr. A. M. SAMUEL: Is the right hon. Gentleman aware that there is a great shortage of employment in many West End establishments dealing in hand-sewn boots, and will he give every opportunity to these men of being trained?

Dr. MACNAMARA: We have a number of men training in that class of work and they are very efficient at it. In regard to
the question of the hon. Member (Mr. Waterson), the latter part of my answer tells him fully what machinery we have in existence for securing that these men shall have a reasonable prospect of employment at the end of their training. We take the advice of the local and central technical advisory committees. They tell us from time to time how many men may be safely admitted with a view to probable employment at the end of their training. I do not know that we can do more.

Mr. HAILWOOD: Is it not a fact—

Mr. SPEAKER: We must move a little more rapidly.

MINISTRY OF LABOUR, IRELAND.

25. Mr. DONALD: asked the Minister of Labour the number of persons employed in the Ministry of Labour in Ireland during 1914 and 1920, also the number of permanent and temporary officials employed in the Labour Exchanges in Ireland during 1914 and 1920; and how many in each case are ex-service men?

Dr. MACNAMARA: The total number of persons employed by the Ministry of Labour in Ireland on 25th June, 1920, was 662 men and 263 women, making a total of 925 persons (including branch managers and cleaners, who are part-time staff). Of this total, 758 were full-time staff, comprising 534 men (including 354 ex-service men) and 224 women. Of the full-time staff on that date, 111 men and 28 women were permanent and 238 men and 64 women were temporary, making a total of 349 men (including 215 ex-service men) and 92 women. As regards the figures for 1914, my hon. Friend is doubtless aware that the Ministry of Labour, as such, did not exist at that time. There were, however, 181 permanent and 19 temporary officers employed in Ireland on 27th June, 1914, in the (then) Labour Exchange service, which was at that time under the Board of Trade.

Mr. DONALD: Is the right hon. Gentleman aware that the proportion of women employed in Ireland is far too high, and that their places could be taken by ex-service men who are unemployed in Ireland to a very large extent?

Dr. MACNAMARA: My hon Friend had better look at the detailed figures
which I have given as regards the proportion of ex-service men. If he will do that and communicate with me I will go into the matter.

IRELAND.

FLAX.

26. Mr. LAWSON: asked the Minister of Labour whether he has made representations to the Prime Minister of the need for flax in view of the state of unemployment in Ireland?

Dr. MACNAMARA: The Government fully realise the need of increasing flax supplies, whether by importation or otherwise, and have for some time been giving careful attention to the matter.

Lieut. - Commander KENWORTHY: Has the right hon. Gentleman impressed upon the Cabinet the necessity of admitting Russian flax at the earliest possible moment?

DOMINION HOME RULE.

56. Captain FOXCROFT: asked the Prime Minister whether, in view of his letter to the Leader of the House before the General Election and of his declaration of 22nd December, 1919, a scheme for Dominion Home Rule for all Ireland, without the consent of Ulster, would be considered by the Government?

Mr. BONAR LAW: The answer is in the negative.

ATTACK ON SOLDIERS, DUBLIN.

74. Colonel ASHLEY: asked the Chief Secretary for Ireland whether a Report is yet available as to the result of the inquiry into the circumstances under which an armed guard was recently disarmed at the King's Inns, Dubliin; and, if so, what is the nature of the Report?

Mr. CHURCHILL: I have ben asked to reply to this question. The General Officer Commanding-in-Chief in Ireland reports that, as a result of the inquiry which he has made, two of those concerned are being tried by Court Martial The matter is, therefore, sub-judice.

POLICE BARRACKS (ATTACKS).

75 and 76. Colonel ASHLEY: asked the Chief Secretary for Ireland (1) what promotion, decoration, or reward has been granted to Sergeant Larkin and
the five constables who successfully defended Blarney Barracks, county Cork, on 1st June, and beat off an attack after a two-hours' fight; what compensation has been or will be paid to Mrs. Larkin for the injuries she received from the bomb explosion which partially wrecked the barracks;
(2) what promotion, decoration, or reward has been granted to the policemen under Sergeant Lawless who beat off an attack on Farran Barracks, county Cork, after a three-hours' fight on 20th June; and whether the Government have recognised the services of the police in charge of the barrack at Brosna, county Kerry,. who, after a two-hours' seige on 19th June, forced a large party of armed raiders to retire with loss?

The ATTORNEY-GENERAL for IRELAND (Mr. Denis Henry): The matters referred to in both these questions are at present under the consideration of the Reward Board of the Royal Irish Constabulary, who will deal adequately with the claims of all those gallant men. The delay is due to the fact that one member of the Board has been ill, and the other member was wounded in a recent attack in Dublin.

Colonel ASHLEY: Can the right hon. and learned Gentleman state whether, apart from decorations or rewards to the constables, consideration will be given to the question of compensation for the wives and families of these constables, who were injured in these attacks and explosions?

Mr. HENRY: Yes, I think that is a matter which will have to be considered.

OFFICIAL SECRETS.

77. Mr. PALMER: asked the Chief Secretary to the Lord Lieutenant of Ireland whether he has information that through the Civil Service clerks employed in the administrative department of the Royal Irish Constabulary office, Dublin Castle, important official secrets have become known to Sinn Feiners: whether it was through a leakage in this department that the movements of Assistant-Inspector General Roberts became known, with the consequent determined attempt on his life recently made in the streets of Dublin; and whether, in view of the danger arising from the employment of Civil Service clerks in the Royal Irish Con-
stabulary office, he will take steps to have them replaced by pensioned policemen?

Mr. HENRY: I have no reason to believe that there has been any leakage of official information through the Civil Service clerks or others employed in the administrative department of the Royal Irish Constabulary. The answer to the last part of the question is in the negative.

WOMEN (EMPLOYMENT AND TRAINING).

27. Colonel NEWMAN: asked the Minister of Labour why the central bureau for women's employment has been superseded by the central committee on women's training and employment; did he nominate any women to serve on this latter committee; and, if so, will he give their names and the bodies and interests whom they represent?

Dr. MACNAMARA: There is no question of the Central Committee on Women's Training and Employment having superseded the Central Bureau for the Employment of Women, which is an employment agency which charges a registration fee to employers and clients.
The Central Committee previously worked under the Local Government Board, and, when that Department ceased to exist, was taken over by the Ministry of Labour. I will, if I may, circulate with the OFFICIAL REPORT a detail of the membership of the Committee. The members are not appointed as representing particular bodies and interests but as representing women's interests generally.
The present constitution of the Central Committee on Women's Training and Employment is: The Marchioness of Crewe (Chairman), Miss Mary R. MacArthur (Hon. Secretary), Mrs. H. J. Tennant (Hon. Treasurer), Lady Askwith, Miss Lilian C. Barker, Miss Margaret C. Bondfield, Mrs. Austen Chamberlain, Mrs. Gasson, Miss R. E. Lawrence, Miss A. Susan Lawrence, The Hon. Mrs. Alfred Lyttelton, Miss Violet Markham, Lady Midleton, The Hon. Lily Montagu, Dr. Marion Phillips, Lady Boxburgh, Miss Squire, The Marchioness of Londonderry (Ireland), Miss F. H. Durham, Miss A. Anderson, Miss G. Tuckwell, Lady Kenmare (Ireland).
Two representatives for Scotland are now under discussion.

Colonel NEWMAN: Am I to understand that the Central Bureau for the Employment of Women is still in existence?

Dr. MACNAMARA: Yes.

NATIONAL RELIEF FUND.

28. Colonel NEWMAN: asked the Minister of Labour whether the professional classes sub-committee formed in connection with the National Relief Fund is still in existence; whether the National Relief Fund was subscribed by the public for the definite purpose of relieving cases of hardship in all classes of society, and not only of the working classes; and, if so, why have the committee who administer the fund only allocated an average yearly sum of about £10,000 to the relief of the professional classes who have suffered more than any other class as a result of the War?

Dr. MACNAMARA: The Government have no responsibility for the administration of the National Relief Fund, which is entirely in the hands of the executive committee. I understand that the amount appropriated for the relief of distress among the professional classes was determined by the number of cases reported by the various organisations which acted as agents to the Fund in this connection. The committee set no limit to the total amount that might be expended on the relief of this class of distress, and they refused no grant recommended by the professional classes sub-committee. This sub-committee has now been wound up, and further cases requiring assistance are being dealt with through the professional classes war relief council, to which a block grant was made (on the recommendation of the sub-committee) to meet outstanding cases.

GAS TRADE DISPUTE (SETTLEMENT).

31. Colonel NEWMAN: asked the Minister of Labour whether a settlement between the owners and those employed in gas undertakings has been arrived at; and, if so, will he give the terms and the total amount, if any, by which the industry will have to bear as a consequence of such settlement?

Dr. MACNAMARA: By an agreement between the parties, settlement has been reached in this dispute which provides, I understand, for the payment of an advance of 1s. per shift or per day to each employee, and for certain alterations in the conditions regarding holidays and Sunday work. I have no information as to the cost of the settlement.

Colonel NEWMAN: From what Government Department can I get the particulars?

Dr. MACNAMARA: I should very much doubt whether any Department would have the information.

UNEMPLOYMENT INSURANCE BILL.

32. Sir BURTON CHADWICK: asked the Minister of Labour what amount of contribution under the Unemployment Insurance Bill would be necessary from employer and employé, assuming the State contribution to remain as at present provided in the Bill, to provide funds for a benefit amounting to, in the case of men, £1, and in the case of women, 16s.?

Dr. MACNAMARA: As stated in paragraph 7 of the Report by the Government Actuary (Cd. 796), the joint contributions required from employer and employé in order to provide benefits of £1 and 16s. for men and women respectively, with no "waiting period," would be 1s. 1d. in the case of men and 10d. in the case of women, assuming the amount of the State contribution to remain as proposed.

HOUSING.

WOODEN HOUSES, WREXHAM.

33. Sir W. DAVISON: asked the Minister of Labour whether he is aware that the executive council of the General Union of Operative Carpenters and Joiners have refused to sanction in the erection of wooden houses at or near Wrexham the employment of 200 women who have had from two to three years' experience in the manufacture of huts, whereby the erection of houses in the district is being delayed and the women are precluded from taking employment which is awaiting them: and what steps he proposes to take in the matter, in view of the Government's
pledges that men and women should be given equal opportunities in the various professions and industries?

Dr. MACNAMARA: I am informed by Messss. William Thomas and Sons that they propose to employ 200 women to assist in building wooden houses, for which they have contracts in various parts of the country, and that objections have been raised by the local branch of the General Union of Operative Carpenters and Joiners. I am making further inquiries into the matter, and will communicate the result to my hon. Friend.

Sir W. DAVISON: Is the right hon. Gentleman aware that the learned professions, such as the Bar and solicitors, is thrown open to women, who are also appointed Justices of the Peace, and will he take steps to see that women are not prevented by the action of trade unions from undertaking employment for which they are skilled?

Dr. MACNAMARA: I have undertaken to make inquiry into this particular case.

34. Sir W. DAVISON: asked the Minister of Labour whether his attention has been called to the fact that the Executive Council of the General Union of Operative Carpenters and Joiners have forbidden their Wrexham branch to relax their trades union regulations, whereby 40 ex-soldiers are deprived of an opportunity of earning their living in performing partly-skilled repetition work which could be done by any fairly intelligent man after a few days' training, the full rate of wages ruling in the area having been agreed to be paid by Messrs. William Thomas and Sons, who have entered into a contract for the erection of wooden houses for the housing of the working classes in the district; whether he is aware that the provision of urgently needed houses is thereby being delayed; and what action he intends to take in the matter?

Dr. MACNAMARA: I understand that the proposal made by the firm of Messrs. William Thomas and Sons was that they should engage from 40 to 50 disabled ex-service men for a three years' course of training as joiners, and 5 disabled men for a similar course of training as wood machinists, the weekly wage to be paid by the firm being 30s. for the first year; 40s. for the second year; and 50s. for the
third year; and these wages were to be made up to £3 by the Training Department of the Ministry of Labour. The arrangements for training in these trades are regulated by a scheme prepared in agreement with the trade unions concerned. The proposal, which differs in certain respects from this agreement, was considered by the Local Technical Advisory Committee for the Building Trades at Wrexham, and submitted to the local branches of the trade unions concerned. These branches declined to agree to the proposal. A conference is being arranged between the Local Employment Committee at Wrexham and the Local Federation of Building Operatives, at which I hope that a scheme for the training of the ex-service men in question will be agreed upon.

Sir W. DAVISON: Is the right hon. Gentleman aware that for months past both he and the Prime Minister have stated that negotiations were in progress, and will he take steps to come to a definite conclusion, whereby ex-service men may secure employment, having regard to the statement to-day that 180,000 men and 14,000 officers are still out of employment?

Mr. LAWSON: Is the right hon. Gentleman aware that the Members of this House are continually discussing these matters without knowledge of the actual scheme, and will he expedite the issue of the White Paper in order that hon. Members may know something about the scheme?

Dr. MACNAMARA: My hon. Friend is dealing with the scheme for the training of disabled soldiers in regard to which I have promised to lay a White Paper; but my hon. Friend (Sir W. Davison) is dealing with the employment of ex-soldiers.

Mr. LAWSON: Does not the scheme for training also lay down the conditions under which the men shall be employed after training?

Dr. MACNAMARA: In respect to that I am in consultation with the local Technical Advisory Committee. On the question of employment, in connection with this case, I have been making representations for some time. There is some difficulty, but I am very hopeful by the
conference to which I have referred that we shall get a happy solution. With the best goodwill in the world, it very often happens that any rash haste in these matters defeats the object in view. If my hon. Friend wishes to help these men, he will give us an opportunity of dealing with this matter in a way which will best serve the interests of all concerned.

DIRECT LABOUR, ACTON.

37. Mr. LORDEN: asked the Minister of Health if his attention has been called to the fact that the Acton borough council are paying excessive rates of wages or unauthorised allowances to building trade labour in their direct employ on housing schemes contrary to the model form of contract, and are also sanctioning such unauthorised payments being made by contractors employed by them; and what action does he propose to take to prevent this bidding for labour?

The MINISTER of HEALTH (Dr. Addison): The action of the Acton borough council in making certain allowances to workpeople employed in connection with the council's direct labour housing scheme and by the council's contractors has been brought to the notice of the Department. A letter has been sent to the Acton council informing them that no payment in excess of the agreed standard rates for the district should be allowed in connection with the council's housing schemes.

Mr. LORDEN: Will the right hon. Gentleman receive a deputation on this matter, which is causing a great deal of unrest among employers and employed?

Dr. ADDISON: It depends on whom the deputation is from. I would like more precise information.

Sir HARRY BRITTAIN: Is it not a fact that the wages paid in the Acton district are not those agreed on in the neighbourhood, and that there is no such body as the Acton borough council?

Mr. BILLING: Is not a cause of a great deal of the increase in many cases luxury building, and that builders are offering bonuses of £1 a week for trade union workers, with the result that they are drawing all the men away from private schemes?

Dr. ADDISON: The practice of a number of employers of offering bribes must have a disastrous effect on the industry.

Mr. BILLING: Is it not possible, having regard to the powers possessed by the Government, to take steps to stop such a flagrant practice?

Mr. LORDEN: Will the right hon. Gentleman seriously consider the question of dealing with this now, and not leave it until it becomes acute?

BUILDING MATERIALS.

38. Mr. SWAN: asked the Minister of Health if is he is aware of the protests of local authorities due to the inaction of the Government in not taking steps to prevent the continual increases in the cost of materials for building, and that such prices are materially retarding the progress of the erection of houses for the working classes, and add considerably to the cost thereof; and if the Government will take immediate steps to reduce the present prices and prevent further rises.

71. Mr. CROOKS: asked the Minister of Health whether he has received a resolution from the Woolwich borough council and any other local authorities protesting against the failure of the Government to deal with the continual increases in the cost of building materials, which is retarding the erection of houses; and whether the Government propose to take any action in this matter?

Dr. ADDISON: I have received a number of resolutions on this subject from local authorities, but as I have previously stated they are founded on a misapprehension. I myself take any action that is possible for me in the matter, and some time ago my right hon. Friend the President of the Board of Trade ordered an investigation into the whole question by a Committee appointed under the Profiteering Act. The inquiries of that Committee are not yet completed.

Mr. SWAN: Is the right hon. Gentleman aware that these trade combines are keeping a large number of men out of employment, that trade unionists are protesting against such combines, and will he take some steps to break up combinations which are holding up the building materials of the country?

Dr. ADDISON: I am not aware that they are keeping trade unionists out of work, but the whole of the matter is dealt with by the appropriate Department. I cannot take any action until I get some recommendations.

MUNICIPAL BONDS.

41. Mr. BRIANT: asked the Minister of Health what is the total sum of money which it is estimated must be raised by means of municipal housing bonds during the current year if the full housing programme of the Government is to be carried out; and what is the total sum of money raised by the sale of these bonds to date?

Dr. ADDISON: The total sum required for housing purposes for the year is estimated at £120,000,000, but it is impossible to say how much of this will be raised by local housing bonds, mortgages of rates, or issue of stock respectively. As regards the amount raised by local housing bonds, I would refer the hon. Member to the replies given on 6th May and 18th June to the hon. Members for Dulwich and Lincoln respectively, of which I will send him copies. The returns for June are not yet available.

Lieut.-Colonel J. WARD: Will the right hon. Gentleman issue a circular to friendly societies and trade unions who are greatly interested in this business requesting them to invest their surplus funds in housing bonds and assist to house the people of the country?

Dr. ADDISON: I know that some trade unions have already made substantial contributions, but I am indebted to my hon. and gallant Friend for his useful suggestion.

GOVERNMENT GRANT.

44. Mr. LORDEN: asked the Minister of Health if, when issuing fresh Regulations for the increased grants and extension of time for grants to persons building houses, he will arrange that such grants apply to houses up to a superficial plan area of 2,500 feet and with more than four bedrooms, it being found in practice that a floor area of 1,400 feet gives small rooms and cramped accommodation?

Dr. ADDISON: I have the question under consideration. but am not able to make any statement at present.

BRICKS, CARSHALTON.

Viscount CURZON (by Private Notice): asked the Minister of Health whether representations have been made to him to the effect that the provision of additional housing by the Carshalton Urban District Council is being seriously hindered by the small number of bricks which are being laid?

Dr. ADDISON: Notice of the question has not reached me. I have had information about this case, but I am afraid I have not got it at hand.

Mr. MILLS: Is it not the fact that the high price of eggs is due to the small number which are being laid in England?

SMALL-PDX, GLASGOW.

35. Mr. WATERSON: asked the Minister of Health how many cases of small-pox have occurred in the City of Glasgow this year; and what steps are being taken to prevent the spread of the disease?

The SOLICITOR-GENERAL for SCOTLAND (Mr. C. D. Murray): I have been asked to reply to this question. The number of cases of small-pox in Glasgow up to the 2nd instant was 306. As regards the latter part of the question I would refer the hon. Member to the reply given by my right hon. Friend on the 1st instant to a question on this subject by the hon. Member for Newton.

Mr. WATERSON: Were four-fifths of these 306 cases vaccinated persons?

Mr. MURRAY: I have not the exact figures, but I should be glad to communicate with my hon. Friend.

AMERICAN SOLDIERS (EXHUMATIONS).

36. Lieut.-Colonel BUCKLEY: asked the Minister of Health if bodies of American soldiers interred in the Liverpool district are being exhumed for transfer to America; and, if so, will he state where these bodies are being recoffined and what arrangements are being made to avoid risk of infection?

The SECRETARY of STATE for the HOME DEPARTMENT (Mr. Shortt): The reply to the first part of the question
is in the affirmative. These removals are being carried out by the United States military authorities with the aid of an expert staff and with the most careful precautions against the possibility of any risk to the public health. The remains are thoroughly disinfected immediately on the coffin being opened, and are at once replaced in a metal case, which is hermetically sealed. This takes place in the cemetery and is completed in a very short time after the exhumation. I am satisfied that no fear of any danger to the public health need be entertained.

NATIONAL INSURANCE ACT (MEDICAL OFFICERS).

40. Sir J. D. REES: asked the Minister of Health what the Government has decided in respect of placing the medical officers of institutions approved under Section 15 (4) of the National Insurance Act on the same footing as panel doctors in respect of War allowance for increased expenses without bringing their books under Government audit?

Dr. ADDISON: I may refer my hon. Friend to the first part of the reply given on the 29th June to the hon. Member for Lincoln, and to the reply given on the 29th October, 1919, to the hon. Member for Nottingham West on this matter. I have just received a further letter from the Friendly Societies' Medical Alliance, which represents the great majority of these institutions, asking for a further interview on the subject, and this is being arranged.

LAND PURCHASE.

42. Captain W. BENN: asked the Minister of Health whether he is aware that on 4th March, 1914, the then Prime Minister stated that in the case of every future purchase of land effected or facilitated out of moneys provided by Parliament, whether wholly or in part, or whether by way of grant, loan, or otherwise, he would give instructions for a record to be kept showing the annual value as adopted for rating purposes at the time of purchase; whether he is aware that on 13th February, 1917, the present Lord Privy Seal stated that this record was being kept by the
Departments concerned; and if he will say when, why, and on whose instructions the Departments concerned ceased to keep this record?

The FINANCIAL SECRETARY to the TREASURY (Mr. Baldwin): The compilation of the record, referred to in the first part of the question, is part of the work performed by the Inland Revenue Valuation Office, and is still being proceeded with.

Captain BENN: May I ask the Minister of Health why he cannot give the information asked for, and compare the rateable value of the land purchased for housing with the price which is paid?

Dr. ADDISON: Portions of the land bought for houses are only parcels of land which are not separately assessed, while the rates cover particular estates or farms of which the parcels purchased are only part. We could not dissect them.

Captain BENN: When I asked the right hon. Gentleman the aggregate value of the land purchased, he told me he had no information available?

Dr. ADDISON: That is so. The aggregate is made up of separate portions which are separately assessed, and we cannot arrive at the aggregate.

Colonel WEDGWOOD: Is the right hon. Gentleman not aware that over and over again public Departments—[HON. MEMBERS: "Order."]

68. Mr. BRIANT: asked the Lord Privy Seal whether a complete Return can be made showing, for each district throughout the country, how much land has been bought for housing sites, for small holdings, for land settlement, and for farm colonies, respectively, and in each case what has been the price and what was the previous rateable value?

Mr. BONAR LAW: All the information available has been given to the House recently by the Ministers concerned in reply to questions, and in view of the labour and expense which would be involved in the preparation of it, I do not feel that the Government would be justified in granting a complete Return.

PEACE TREATIES.

SHANTUNG.

45. Mr. MACLEAN: asked the Prime Minister whether the signatories to the Peace Treaty have embodied in the Treaty their full obligations; and whether Japan has done so or whether her representatives refused to state the intentions of Japan regarding Shantung?

Mr. BONAR LAW: With regard to the first part of the question, it is outside the functions of His Majesty's Government to make any statement on behalf of other signatories to the Treaty of Peace; but as far as His Majesty's Government are concerned, the answer is in the affirmative. For the reply to the second part of the question, I have to refer the hon. Member to an official statement made by the Japanese Peace Delegates in the European Press on or about the 2nd May, 1919, and to a further official statement of the Japanese Government, which also appeared in the Press of August 6th, 1919.

46. Mr. MACLEAN: asked the Prime Minister whether there is in existence any secret agreement or commitment between Japan and the Governments of Great Britain, France, and Italy by which these Governments have agreed to support Japan's claim to Shantung?

Mr. BONAR LAW: In reply to the hon. Member's question, His Majesty's Government cannot undertake to make any statement on behalf of the other Governments mentioned. The commitments of His Majesty's Government to Japan regarding Shantung are contained in Articles 156–158 of the Treaty of Peace.

47. Mr. MACLEAN: asked the Prime Minister whether China offered to sign the Treaty of Peace provided the Council of Four would guarantee to hear China's case regarding Japan and Shantung; and whether he can state if the Allied Council declined to accept the offer of China?

Mr. BONAR LAW: So far as His Majesty's Government are aware, the Chinese Government instructed their delegates at Paris to sign the Treaty as it stands In reply to the second part of the hon. Member's question, I regret that I am not in a position to give him the information he desires, as, by a decision of the Powers at the Peace Conference, the proceedings cannot be divulged.

Mr. MACLEAN: Does not the decision that was come to involve a violation of the statement made during the War that agreements would be openly come to?

Mr. BONAR LAW: I never heard of any commitment that there would be no negotiations conducted in private.

AIRCRAFT (GERMANY).

81. Lieut.-Colonel FREMANTLE: asked the Secretary of State for War whether Germany is preparing a fleet of 47,000 aeroplanes; and what steps are being taken to seize their stock and prevent further manufacture?

Mr. CHURCHILL: The manufacture of aircraft by Germany at the present time is stopped. This situation cannot be substantially modified for several months. There will no doubt grow up in time a German aircraft industry. I cannot forecast its development, but as the figure of 47,000 aeroplanes is approximately that of the whole war construction of Germany for five years, it is, to say the least, highly improbable that any such figure could be reached under peace conditions for a great many years to come.

Mr. PEMBERTON BILLING: Are the Government taking any steps to supervise the design of the German commercial aeroplane to see that it is not capable of rapid conversion into a war machine?

Mr. CHURCHILL: The question of the execution of the Treaty is entrusted to the Inter-Allied Commission on the subject, and I cannot undertake to answer on their behalf.

Sir W. JOYNSON-HICKS: Does the answer that aircraft are not being constructed in Germany extend to airships?

Mr. CHURCHILL: I could answer that with notice.

TRANSPORT.

RAILWAY AMALGAMATION.

48. Lieut.-Commander KENWORTHY: asked the Prime Minister whether it is proposed to introduce legislation this Session for the amalgamation of the existing railway systems as outlined in Cmd. 787; whether separate Bills will be introduced for the fusion of each rail-
way; and will Bills be introduced in the House of Commons or in another place?

Mr. BONAR LAW: It is hoped that a Bill may be introduced in the autumn the details of which it is proposed to discuss with the interests concerned before introduction. It is hoped that separate Bills will not be necessary for each amalgamation.

Lieut. - Commander KENWORTHY: Will the right hon. Gentleman answer the third part of the question?

Mr. BONAR LAW: It is too soon to decide; in all probability in this House.

BAKONBA CAMP.

49. Sir J. D. REES: asked the Prime Minister whether the camp at Bakonba is still in being; if so, how long it will be maintained, and under what special obligation the British taxpayer rests in this behalf other than such as is common to the Allied Powers?

Mr. BONAR LAW: Every effort is being made to secure the repatriation of the occupants, and considerable progress has been made.

Sir J. D. REES: What is the obligation on the British to provide this expensive camp for the benefit of Armenians?

Mr. BONAR LAW: I do not think that that obligation could be avoided.

Lieut.-Colonel FREMANTLE: Was not the obligation incurred as a moral obligation to those who came pouring in for British protection regardless of the considerations?

Mr. BONAR LAW: That is largely so.

TURKEY.

CHRISTIAN MINORITIES, ASIA MINOR.

50. Mr. AUBREY HERBERT: asked the Prime Minister whether the Supreme Council has taken any steps to safeguard the lives of Christian minorities in Asia Minor that have been endangered by the Greek advance into Anatolia?

Mr. BONAR LAW: The Greek advance is merely part of Allied operations to resist the aggression of the rebel Nationalists directed against the execu-
tion of the Peace terms. The suggestion that the Turks were, under the circumstances, likely to commit atrocities has not so far been borne out by events.

WATER SUPPLY, LONDON.

54. Mr. PALMER: asked the Prime Minister whether, in view of the danger to the health of London and to the industries of the Metropolis consequent on the threat of employés of the Metropolitan Water Board to strike, the Government can give the assurance that adequate steps have been taken to counteract any intention to stop the supply of water in London?

Mr. BONAR LAW: The Government have been in communication with the Metropolitan Water Board, which is fully alive to its duty to maintain a proper water supply for London. The Works Committee of the Water Board have agreed in principle to refer the matter in dispute to arbitration, and negotiations are proceeding between the parties as to the actual terms of reference with a view to the matter coming before the Industrial Court on Tuesday next.

IMPERIAL WIRELESS TELEGRAPHY COMMITTEE.

57. Sir F. HALL: asked the Prime Minister whether the Report of the Imperial Wireless Telegraphy Committee has been considered by the Government; and whether, having regard to the urgency of the matter, he will make a statement as to the action proposed to be taken on the recommendations of the Committee?

Mr. BONAR LAW: The Government have not yet had an opportunity of considering this Report, and until they have done so I cannot make any statement on the subject.

PUBLIC CONTRACTS (UNEMPLOYMENT).

61. Mr. NEWBOULD: asked the Lord Privy Seal whether public contracts are regularised in such a way as to reduce unemployment to a minimum; if not, whether in future such regularisation will be adopted?

Mr. MACNAMARA: I have been asked to reply. The question of regulating public contracts, with a view to reducing unemployment, has from time to time formed the subject of careful consideration and has recently been discussed in detail with the various contracting Departments. Any attempt to interfere with the ordinary method of placing contracts in order to reduce unemployment must be undertaken with caution; otherwise the effect may easily be to increase the contract price and delay delivery without increasing the volume of employment. Moreover, during the War, and to a less degree since, no adjustment of Government contracts for the purpose suggested has been necessary or possible. I realise, however, the importance of laying plans for the future in this connection, and hope that it may be possible to make arrangements with a view to meeting the object which my hon. Friend has in mind.

MESOPOTAMIA.

ANGLO-FRENCH AGREEMENT.

62. Mr. NEWBOULD: asked the Lord Privy Seal whether the Government is now in a position to lay the terms of the Anglo-French agreement in regard to Mesopotamia on the Table of the House?

Mr. BONAR LAW: As stated by the Prime Minister on the 28th June, we are in communication with the French Government on this subject.

Captain W. BENN: When is it expected that we shall have particulars?

Mr. BONAR LAW: We have had communications but we have not had a reply.

OIL.

63. Mr. KENYON: asked the Lord Privy Seal whether he will have the terms of the pre-War concessions for the exploitation of the oil in Baghdad and Mosul laid upon the Table of the House?

Mr. BONAR LAW: I cannot add anything to the reply given by the Prime Minister to the hon. Member for Newcastle-under-Lyme on the 28th June.

Lieut.-Commander KENWORTHY: What is the objection to laying on the Table the terms of the concession granted by the Turkish Government before the War to private companies?

Mr. BONAR LAW: The reason is given in the answer to which I have referred the hon. Member.

Captain W. BENN: Why cannot we have the agreement?

Mr. BONAR LAW: If my hon. Friend will look at the answer and the reason given he will see, but I am afraid he may not regard it as satisfactory.

EGYPT (LORD MILNER'S MISSION).

67. Mr. C. WHITE: asked the Lord Privy Seal whether he can now say when the Milner Report may be expected?

The UNDER-SECRETARY of STATE for FOREIGN AFFAIRS (Mr. Cecil Harmsworth): I am not yet in a position to say when the Report of Lord Milner's Mission may be expected.

GENERAL NURSING COUNCIL.

72. Mr. ALFRED DAVIES: asked the Minister of Health whether he appointed the present Chairman of the General Nursing Council set up under the Nurses Registration Act without consultation with the members of the Council; and, if so, will he state his authority for this action?

73. Mr. R. RICHARDSON: asked the Minister of Health whether he is aware that the Chairman of the General Nursing Council has neither experience nor knowledge of medical or nursing matters sufficient to enable him to understand and to guide the General Nursing Council in its deliberations on professional subjects?

Dr. ADDISON: The General Nursing Council has to prepare statutory rules and to perform judicial functions in relation to the removal of unfit persons from the register, and, in view of the amount of quasi-legal work devolving on them, I thought it desirable to appoint a Chairman with legal experience, and I was fortunate in being able to persuade Mr. Priestley, K.C., to accept this post. I was not under any obligation to consult the members of the Council, and I accept full responsibility for the appointment. There is no foundation for the suggestion that the Council has been hampered in
the way suggested; on the contrary, it continues to make rapid progress.

Mr. RICHARDSON: Is the right hon. Gentleman aware of the discontent that exists?

Dr. ADDISON: I am aware that there is a lot of foolish gossip, which has nothing to do with the matter.

PHOSPHATES, NAURU ISLAND.

78. Major BREESE: asked the Under-Secretary of State for the Colonies whether it is proposed to control the price to the consumer of phosphates obtained from Nauru Island.

The UNDER-SECRETARY of STATE for the COLONIES (Lieut.-Colonel Amery): I would refer my hon. Friend to the answer which I gave yesterday to the hon. Member for Flint.

HUNGARY.

84. Colonel WEDGWOOD: asked the Secretary of State for War whether his attention has been drawn to the safe conduct given to Peter Agoston by General Gorton and to Agoston's continued imprisonment in spite thereof; and what action he proposes to take in the matter?

Mr. CHURCHILL: The answer to the first part of the question is that General Gorton's protection safeguarded Peter Agoston against imprisonment for any political offence. This safeguard remained in force for three months, during which Agoston could have left the country had he wished to do so. Agoston was eventually arrested on a purely civil charge of misappropriating public money. The answer to the second part of the question is that representations are being made to ensure that the alleged civil crime is not merely a pretext for punishment on political grounds.

Colonel WEDGWOOD: Is the right hon. Gentleman not aware that there are no political crimes in Hungary, and that what are called political crimes in this country are called civil crimes there, and that this misappropriation of money means that he spent money on Government business; and, further, has he seen
the safe conduct and does he not realise that no period of time was put to it?

Mr. CHURCHILL: As my hon. Friend knows, I have given some attention to this case, and a communication has been made, at the instance of the War Office, which is in harmony with what I have said in the last part of my answer. I do not think it is possible for me to do any more.

Colonel WEDGWOOD: Will General Gorton be continued out there?

Mr. STANTON: Think of your own country.

Mr. CHURCHILL: I think General Gorton has as much claim to considerate treatment as this gentleman in whom the hon. Gentleman is interested.

ROYAL NAVAL AIR SERVICE.

86. Mr. R. YOUNG: asked the Secretary of State for Air what was the method adopted to inform commanding officers of the names contained in the promotion lists issued by the Royal Naval Air Service; and whether the promotion lists were equivalent of, and as authoritative as regards ratings, as was the official "Gazette" in regard to officers?

Mr. CHURCHILL: Promotions of Royal Naval Air Service ratings were promulgated in Royal Naval Air Department Temporary Memoranda, a series of temporary orders circulated to all Royal Naval Air stations. These were regarded as authoritative, and were used in connection with the adjustment of the pay of the ratings concerned. The promotions of officers were published in the "London Gazette" or in the daily lists of appointments circulated by the Admiralty to Naval Commanders-in-Chief, senior Naval officers, etc.

QUESTIONS TO MINISTERS.

The following question No. 88 stood on the Order Paper in the name of Mr. Palmer:
To ask the Secretary of State for War whether, having regard to the statements made by General Golovin in connection with the sending of British troops to Archangel, he will consider the advisability of recommending the Army Council to cancel the severe reprimand of the court-martial that
tried the case of Major Sherwood Kelly, V.C., whose offence was writing to the press protesting against troops sent to Russia for defensive purposes being used for offensive purposes in furtherance of an ambitious scheme of campaign.

Mr. PALMER: On a point of Order. May I ask question No. 88?

Mr. SPEAKER: That is the hon. Gentleman's fourth question.

Mr. PALMER: I withdrew one question and notified the Clerk at the Table.

Mr. SPEAKER: It is too late now. That should have been done before the question appeared on the Paper.

BRITISH ARMY.

WAR MEDALS.

91. Sir R. NEWMAN: asked the Secretary of State for War whether it is proposed that on the British war medals and Victory medals the rank of lance-corporal and lance-sergeant shall be ignored and the recipients of these medals who held these ranks will be described as privates; whether lance appointments were marked on the 1914–15 stars; and, if so, why this rule should only apply to some medals and not to all?

Mr. CHURCHILL: Owing to the limited space on the rim of the medals and in order to secure uniformity, ranks only are stamped on the British war medal and the Victory medal. Lance-corporal and lance-sergeant are appointments, the respective ranks being private and corporal. The titles of many appointments in the Army are very lengthy and it would be impossible to inscribe them on the rim of the medal. Difficulty in this connection was not experienced in the case of the 1914 Star, or the 1914–15 Star, as more space is available on the back of the Stars.

EXCESS PAY CLAIMS.

93. Captain HOTCHKIN: asked the Financial Secretary to the War Office whether, in the event of officers serving abroad having claims made on them for excess of pay or money due to the home authorities, paymasters abroad may be instructed to accept English cheques in payment and so avoid any loss due to adverse exchange?

Sir A. WILLIAMSON (Parliamentary Secretary, War Office): I am not aware of any case in which an English cheque has not been accepted by paymasters abroad in the circumstances stated, but if the hon. and gallant Member will give me particulars I will have inquiries made, and let him know the result as soon as possible.

94. Captain HOTCHKIN: asked the Financial Secretary to the War Office whether in the case of officers, especially married ones, having to refund excess of pay received, if the sum claimed should exceed one month's pay, they may have the privilege, if they desire to do so, of paying in instalments over a period not exceeding six months?

Sir A. WILLIAMSON: Where immediate repayment would cause undue hardship, it is usual to allow repayment by instalments.

BUSINESS OF THE HOUSE.

Mr. HOGGE (by Private Notice): asked the Leader of the House what business the Government intend taking on Friday?

Mr. BONAR LAW: The Unemployment Insurance Bill,

PUBLICATIONS AND DEBATES REPORTS.

Ordered, That Sir Clement Kinloch-Cooke be discharged from the Select Committee:

Ordered, That Captain Sir Rowland Blades be added to the Committee.—[Colonel Gibbs.]

BILLS REPORTED.

Middlesex County Council (Tramways and Improvements) Bill,

Reported [Preamble not proved]; Report to lie upon the Table.

Hertfordshire County Council Bill,

Reported [Parties do not proceed]; Report to lie upon the Table.

Derwent Valley, Calver, and Bakewell Railway Bill [Lords],

Reported, with Amendments; Report to lie upon the Table, and to be printed.

MESSAGE FROM THE LORDS,

That they have agreed to,

Liverpool Corporation Waterworks Bill, with Amendments.

Amendments to,

Newtownards Urban District Council Bill [Lords],

Filey Urban District Council Bill [Lords],

St. Anne's-on-Sea Urban District Council Bill [Lords], without Amendment.

That they have passed a Bill, intituled, "An Act to confirm a Provisional Order under The Private Legislation Procedure (Scotland) Act, 1899, relating to Airdrie and Coatbridge Tramways." [Airdrié and Coatbridge Tramways Order Confirmation Bill [Lords.]

Airdrie and Coatbridge Tramways Order Confirmation Bill [Lords],

Read the First time, and ordered (under Section 9 of The Private Legislation Procedure (Scotland) Act, 1899) to be read a Second time To-morrow, and to be printed. [Bill 159.]

SELECTION (STANDING COMMITTEES).

STANDING COMMITTEE B.

Sir SAMUEL ROBERTS: reported from the Committee of Selection; That they had discharged the following Members from Standing Committee B (during the consideration of the Ministry of Mines Bill): Lieutenant-Colonel Allen and Mr. Carr; and had appointed in substitution: Mr. Armitage and Mr. Gould.

STANDING COMMITTEE C.

Sir SAMUEL ROBERTS: further reported from the Committee; That they had discharged the following Member from Standing Committee C (added in respect of the Overseas Trade (Credits and Insurance) Bill): Mr. Hilton Young; and had appointed in substitution; Mr. MacCallum Scott.

STANDING COMMITTEE A.

Sir SAMUEL ROBERTS: further reported from the Committee; That they had added the following Members to Standing Committee A (in respect of the Public Libraries (Ireland) Bill and the Sheriffs (Ireland) Bill): Mr. McGuffin and Mr. Jellett.

STANDING COMMITTEE E.

Sir SAMUEL ROBERTS: further reported from the Committee; That they had added the following Member to Standing Committee E: Mr. C. D. Murray.

Reports to lie upon the Table.

Orders of the Day — FINANCE [CIVIL CONTINGENCIES].

Considered in Committee.

[Mr. WHITLEY in the Chair.]

Motion made, and Question proposed,
That it is expedient to extend by one year the period within which sums issued under The Civil Contingencies Fund Act, 1919, are to be repaid to the Exchequer in pursuance of any Act of the present Session relating to Finance.

The FINANCIAL SECRETARY to the TREASURY (Mr. Baldwin): I have put down a new Clause to the Finance Bill on page 1,271 of the Order Paper, which gives power to extend for twelve months the term within which sums advanced under the Civil Contingencies Fund Act of last year may be repaid. The reason that we have to ask for these powers is that, contrary to expectations when the Act was passed last year, the control of food has continued longer than we thought it would be continued, and therefore money will still be required for certain food purchases extending beyond the period when the permission accorded by this Act of Parliament would come to an end. There is no question of any fresh money being employed. It is only proposed under this Clause to retain the use of the money that has already been issued. I was in some little difficulty as to the best way to bring this matter before the House. It could have been done by including the Civil Contingencies Fund Act among the expiring laws to be continued, but I thought that by giving effect to our desire by a Clause in the Finance Bill it would be much the best and most straightforward way of bringing it before the Committee for discussion, when the whole matter might be entered into and explained. This Resolution is, as hon. members are aware, a purely formal proceeding which it is necessary to get through before we can discuss the Clause to which I have alluded. The time for discussion of that Clause, of course, will be when we come, to the new Clauses of the Bill, which I hope will be early next week. I hope that with these few words the Committee will be satisfied to let me have this Resolution preparatory to the discussion which will take place on the Clause itself.

Sir D. MACLEAN: As I understand it, this is a formal Resolution to be the basis of a new Clause which my right hon. Friend will present when we reach that stage of the Finance Bill, and that then we shall have the fullest Parliamentary opportunity of discussing the merits or demerits, as the case may be, of this proposal. I have no opposition to offer to. that proposal. I would like to draw your attention, Mr. Chairman, and perhaps. you would report it to the proper quarter, to the fact that we have constantly to refer to the Statutes of 1919, sometimes, as in this case, without any warning, and that there is no copy of the Statutes of 1919 available on the Table. More than once it has caused us very great inconvenience, and I thought you might perhaps represent this lack in the proper quarter.

The CHAIRMAN: I am informed that although the bound volume for 1919 is not yet issued, the Statutes are available on the Table.

Sir D. MACLEAN: They are not here.

The CHAIRMAN: I am informed that. they are on the Table.

Sir F. BANBURY: I do not want to pursue the subject if what the right hon. Member for Peebles (Sir D. Maclean) says is correct, namely, that we shall have an opportunity of considering this Resolution when it is embodied in a Clause in the Finance Bill, but sitting in this corner I was unable to hear the explanation given by my right hon. Friend (Mr. Baldwin). I should like to know, and I think we ought to know, why it is necessary to, extend by one year the period within which these sums have got to be repaid.

Mr. BALDWIN: I explained it to the Committee.

4.0 P.M.

Sir F. BANBURY: I beg my right hon. Friend's pardon, but I did not hear him. May I with very great submission say that I am not alone in this matter, and that those of us who sit up here rarely hear what right hon. Gentlemen on the Front Bench say? [HON. MEMBERS: "Speak up!"] Apparently we are all tarred with the same brush. I was complaining that not only I, but several hon. Members who sit near me are unable to
hear what the right hon. Gentlemen on the Front Bench say. I did not hear a word of what my right hon. Friend said, and now hon. Members say that they cannot hear me, but I venture to submit that it is not of so much importance. If I ant not asking too much, would my right hon. Friend say why this period is to be extended another year?

Lieut.-Commander KENWORTHY: I understand that this money has not been expended, but is intended to remain at the disposal of the Departments for another twelve months in case they want to use it. Why should not this money go back into the Exchequer, and the Departments concerned present another Estimate in the usual manner? That would give us more control over this money. There is always the temptation, if the Departments have the handling of this money for another year, for a certain official laxity, which we should at all costs endeavour to check.

Mr. BALDWIN: I should like to apologise to the right hon. Baronet, but I think the real reason he did not hear me was that there was a general conversation going on. I did my best to speak against it. I attempted to explain the reason for this new Clause. The food purchases, mainly in sugar, are being continued very much longer than was anticipated when the Civil Contingencies Act was passed last year. Therefore, we need to retain the power of utilising the capital at present employed for food purchases as long as may be necessary, and the formal and technical way of giving us that power is to move a Clause in the terms of that which I have upon the Paper. I propose, in the course of the Debate on that Clause, to give the fullest particulars, which, no doubt, my right hon. Friend will desire to have. My hon. and gallant Friend (Lieut.-Commander Kenworthy) would not have put his question if he had been familiar with the working of the Civil Contingencies Fund. The money that is required for such objects as food purchases may be wanted at a moment's notice, and when the House is not sitting. It is really a bank for the purpose of financing that kind of transaction, but on every occasion when money is demanded for a purpose of that kind a Minute is laid before this House, so that
any hon. Member who has any complaint to make with regard to any particular payment has an opportunity of raising the matter in the House.

Question put, and agreed to.

Resolution to be reported To-morrow (Thursday).

Orders of the Day — WAYS AND MEANS.

Considered in Committee.

[Mr. WHITLEY in the Chair.]

Motion made, and Question proposed,
That the Treasury may borrow by means of national savings certificates issued on such terms as they think fit such sums as they think proper to raise for the purpose as to one-half thereof of being invested in local loans stock or bonds and as to the other half thereof of being applied, together with any sums received by way of interest on any investments made as aforesaid, in reduction of debt, and may issue out of the Consolidated Fund or the growing produce thereof any sums which may be required to be invested or applied as aforesaid, and that there shall be charged on the Consolidated Fund or the growing produce thereof— 
(a) the principal and interest of any national savings certificates issued for the purpose aforesaid; and
(b) any expenses incurred in connection with the issue of any such national savings certificates."

—[Mr. Chamberlain.]

Mr. HOGGE: May we have an explanation of this Resolution?

The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain): This is a Resolution necessary to enable us to discuss the correlative Clause in the Finance Bill. I can state the object of it almost in a sentence, and I am sure that it will have the acceptance of the Committee. It authorises the Treasury to continue to issue Savings Certificates. Our powers to issue them at present cease six months after the termination of War, and, as the movement for national thrift has been an invaluable movement, so the certificate has formed an invaluable part of that movement, and I am sure that I shall be responding to the general feeling of the Committee when I ask that it shall be continued after the emergency which gave rise to it. The other part of the Resolution is to authorise the Treasury to devote half the proceeds of such certificates to local loans, and, in particular at the present time, to housing loans. That is
a concession which I am proposing with some reluctance at the very urgent request of the Savings Committee, in the interests of the Savings Movement, and in order to secure the continued cooperation and goodwill of the local authorities in the movement, so that their movement for housing bonds and our movement shall not be rivals, but shall be jealous workers in friendly co-operation. Of course, there will be an opportunity of discussing the matter on the Clause, and, if any hon. Members who wish to raise any points would reserve their observations for the Clause, I venture to submit that would be the more convenient course. This is merely an enabling Resolution.

Question put, and agreed to.

Resolution to be reported To-morrow; Committee to sit again To-morrow.

Orders of the Day — FINANCE BILL.

Considered in Committee. [Progress, 6th July.]

[Mr. WHITLEY in the Chair.]

CLAUSE 17.—(Personal Allowance.)

(1) The claimant, if he proves that for the year of assessment he has a wife living with him, shall be entitled to a deduction of two hundred and twenty-five pounds, and in any other case to a deduction of one hundred and thirty-five pounds.
(2) If the total income of the claimant includes any earned income of his wife the deduction to be allowed under this Section shall be increased by an amount equal to nine-tenths of the amount of that earned income, but not exceeding in any case forty-five pounds.

The CHAIRMAN: There is a number of rather complicated Amendments relating to this and the next four or five Clauses, which, to some extent, overlap one another. It is my desire that there should be an opportunity for every hon. Member to raise any point that he wishes, but, if I am to do that, I shall require the assistance of hon. Members in maintaining a business-like discussion, so that I do not pass anything over.

Mr. D. M. COWAN: I beg to move, in Sub-section (1), to leave out the words "if he proves that for the year of assessment he has a wife living with him."
There are two Amendments standing in my name, and those two are comple-
mentary. Neither is of any significance in itself, but, read together, the two Amendments make a very considerable, and what might be described as a drastic, change in the Clause. If the Amendments be accepted, the Clause will read:
The claimant shall be entitled to a deduction of two hundred and twenty-five pounds.
I might explain that I have been asked to put this Amendment forward by a very large number of persons who are affected by the Clause, and, as I considered that it was a matter which should be decided upon the floor of the House, I agreed to do so. It is quite true, with regard to many Income Tax arrangements, that we may be referred to the Report of the Royal Commission, but many people in the country who are affected have no opportunity of studying or even of understanding those Reports, and in a matter of this sort people are entitled to have an authoritative statement on the floor of the House. I am quite sure that the Chancellor of the Exchequer will not take it amiss that we should bring this matter forward. Together with every other Member of the Committee, I recognise, not only the great ability which he brings to the discharge of his duties, but also the unfailing courtesy and magnanimity which he shows to all, even to those who differ from him. This Amendment, combined with the next, cuts fairly deep. I take it that marriage in itself is not a matter which should be the subject of any financial abatement. I would like, at the same time, however, to make it clear that those for whom I speak and myself are completely in accord with all abatements in regard to children. Personally, I think we are really moving towards a method of making some direct provision for children, and this abatement in respect of children is really a further step towards that more complete method.
The abatement for marriage is a fairly recent thing in our fiscal system, but since its introduction it has been growing, and it is but right that the Committee and the country should consider where they are going in this matter. I would call attention to a proposal that was made with regard to France. It was that if there were no family after two years of marriage the couple should pay 10 per cent. more Income Tax Hon. Members may laugh at the proposal. It may or it
may not suit France, but I am perfectly certain that it is not one which we should wish to see introduced into this country. Now is the time that we should consider where we are moving with regard to the Income Tax. Abatement with regard to married people may be urged on one or other of two grounds. First, that it will encourage marriage, and, secondly, that the cost for a single person is less than for a married person. On both of those grounds, I think this measure fails. I am sorry the right hon. Member for Peebles (Sir D. Maclean) is not here just now, because, in a discussion in this House some time ago, he said that for himself he would tax bachelors out of existence. We understand, of course, the spirit in which the right hon. Member for Peebles said that, because we cannot think of the right hon. Gentleman as saying anything which was not really meant for some one's good, but at the same time he would render a poor service to the world if he were to tax bachelors out of existence. He would destroy much that is best in literature, in poetry, in drama, and in art, and I am quite sure the person who would seriously propose to abolish bachelor uncles and spinster aunts would bring down upon himself the displeasure of all nephews and nieces. The right hon. Member for Peebles should pity those who lack those graces of mind and person which commend themselves to the opposite sex, and might have had some sympathy with those who have to say with Sir Galahad:
I never felt the kiss of love, Or maiden's hand in mine.
Before passing from the right hon. Gentleman the Member for Peebles, I would suggest that he should not give people the idea that celibacy is something worth paying for. If he were to put marriage under the luxury tax lie might be more successful in getting the people to marry. If I may refer to the Financial Secretary to the Treasury, I would recall to his mind a statement which I think he made some time ago with regard to marriage. He said that all the best men either married or wished to marry. There is a particular pathos about that qualification "wished to marry," but if that is one of the grounds on which this penalising of bachelorhood is based, not an inconsiderable number
of other men than the good men marry, to judge from the various courts before which they appear from time to time, and I would point out also that most of the saints, both men and women, have been celibate, and that even St. Benedict himself was a celibate.
With regard to the second ground, namely, that it is less expensive for a bachelor or spinster to live in a corresponding position of life than it is for a married person, I think all the facts go to contradict that. With regard to lodging and clothing, if anything, the balance is certainly against this principle. Then there are many exceptional cases which are not met by abatement. I have received from my own constituents letters telling me of invalid bachelors who have to keep nurse housekeepers, and among my constituents are many spinsters who require help, and should not be penalised as against married people. It is said that hard cases make bad law, but that seems to be an inverted truth, and that it is bad law that makes hard cases, and we ought not to allow anything in our fiscal system or in any other way to penalise those who do not deserve to be penalised. But there is, I think, a special class deserving consideration. This class includes both men and women. What of the men who were taken for the War, many of them because they were unmarried? The country in its hour of need called first upon the unmarried men, and by doing so we have to recognise a special responsibility towards them. Many of these men are back, it may be, beyond the possibility of marriage, and certainly with regard to those there ought to be some reasonable allowance made.
Then, again, I would call attention to the fact that, owing to the War, there are in this country at the present time tens of thousands of women who never can be married. They have given the best to their country. They had marriage before them, but they lost all, and gave everything they had for their country's sake. I think it is very hard indeed that there should be anything in our financial provisions that would make any discrimination against those people. I have three examples which seem to me to typify the whole case. I take the case of a girl who was married, and whose husband, an officer, was killed. She received a pension. I take the case of another girl of equal age, a com-
panion of the first, who was engaged to an officer and was about to be married, but he was killed before the marriage. She receives no pension. Not only that, but she is penalised if this Clause remains as it stands now. The third case is that of another young woman—a companion of the other two—who married a man who was exempt from the War, who had no anxiety of any kind, and is now in a preferential position. I think that these are matters which we ought to consider in this House. It is sometimes looked upon from rather a humorous point of view, but I can assure the Committee that this differentiation is creating a feeling of bitterness in the hearts of many in this country, and if any time were appropriate for the reconsideration of this matter, I should say it is now. Many of us regret that some time ago the Chancellor of the Exchequer found himself unable to tax war wealth. Are we then at this moment, while allowing hundreds of millions of war wealth to escape, which we believe should come into the coffers of the State, to take some trifling sum, especially from women, many of whom have a dreary present, and nothing to which to look forward but a dreary future. I would, therefore, ask the Chancellor of the Exchequer and Members of this Committee to give to this Amendment at least a sympathetic consideration, in order that those who are affected may know exactly the ground upon which the decision has been come to.

Mr. CHAMBERLAIN: May I be allowed, in a sentence, to acknowledge the kindly reference to myself which my hon. Friend made in the opening sentences of his speech? My hon. Friend's whole case illustrates a difficulty with which, I think, in the general experience, human nature is not infrequently confronted. It merely comes to this, that if you show consideration to one party, it is always alleged that you are doing an injustice to another. My hon. Friend's whole argument proceeds upon an assumption, which is not the assumption upon which the recommendations of the Royal Commission was founded, or upon which this Bill is based. It proceeds upon the assumption that any differentiation between married and single people is a penalty, or is intended as a penalty, on
a single life. That is not so. The differentiation is intended, not as any penalty or reflection on the bachelor or spinster, with whom those of us who are married men will have unlimited sympathy, but as a consideration for the obligations which are incumbent upon married couples. If a man and woman join in matrimony and live together, they are, for the purpose of the tax which we are considering, aggregated for the purpose of ascertaining the rate at which they should pay tax, yet two of them, being dependent upon the income, the strain upon the income is greater than if they were only one. We, therefore, make a recognition of that in giving an exemption on account of the second person, who is interested in the income, as well as the exemption which is common to everybody, whether single or married, of income practically below £150. What my hon. Friend proposes is that there should be no such recognition of the fact that in these cases of married couples living together, there are two people necessarily dependent upon the income, and that the income, on which the rate by which they are assessed is fixed, is the joint income of two people, and not the single income of a single individual.
In fact, my hon. Friend asks the Commitee to say that marriage, with its obligations, should receive no consideration. He asks us to reverse the process which the whole House pressed upon me last year. I think, without exception, last year there was a feeling in this House that, whatever our general views about the Income Tax, about the limit of exemption or abatement, there was a general feeling that the responsibilities of married couples were not sufficiently recognised. What we say in this case is that a single man is exempt from tax, if his total income is below £150, but for a married couple an additional £100 is allowed before they become subject to the tax. I do not think that is too much for the responsibility which marriage involves. I quite agree there are individual bachelors who have obligations, not perhaps in law as binding on them, not perhaps morally as binding as the obligations of husband and wife. You cannot deal in a taxation statute or any statute with every variety of circumstances which exists throughout the land. All you can do is to proceed upon broad principles, and, broadly speaking,
married couples have greater obligations than single persons.

Amendment negatived.

Mr. BILLING: I beg to move, in Subsection (1), to leave out "a" ["has a wife living with him"], and to insert instead thereof the word "his."
This might be considered a mere drafting Amendment, but I think on second consideration it will be found that it is not so.

Mr. CHAMBERLAIN: I will accept it.

Mr. BILLING: After all, this Amendment is one of some substance. The right hon. Gentleman pointed out in his speech that there were hard cases. I am not quite sure whether this is one of the kind he intended. Are we to understand that the Clause, when it speaks of a claimant having a wife living with him, refers to "his" wife, and not to "a" wife?

Mr. CHAMBERLAIN: Surely, that is the interpretation! A wife has always been interpreted by the courts, and everybody else, as being the wife of the man referred to. But if it would be any satisfaction to my hon. Friend to say "his" wife, which is quite clearly the intention of the Bill as it stands, I shall be glad to accept the alteration.

Amendment agreed to.

The CHAIRMAN: We now come to a series of three Amendments dealing with the same point. The one stands in the name of the hon. Member for Twickenham (Sir W. Joynson-Hicks), the other in that of the hon. Member for Wood Green (Mr. G. Locker-Lampson), and the third in the names of the hon. Member for Govan (Mr. N. Maclean) and the hon. Member for Pontypool (Mr. T. Griffiths). I therefore propose to select the one that gives the wider scope for discussion.

Mr. T. GRIFFITHS: I beg to move, in Sub-section (1), after the word "him" ["a wife living with him"] to insert the words" or wholly maintained by him."
We want to know from the Chancellor of the Exchequer whether, supposing a man has a wife, say, in the asylum, he is going to receive the benefit of this Clause. supposing, too, that the wife has been
separated from her husband, will he still be included in the Clause? Again, a man and his wife, as in many cases, may be separated as the result of mutual agreement. What about that case?

Mr. CHAMBERLAIN: Probably the explanation that I shall make will satisfy the Mover and supporters of the Amendment. There are cases when a married couple are only temporarily separated, where the husband is abroad for a cure, or for business, and so their residence is compulsorily apart. There is also the case put by the hon. Member where the wife may be confined in an asylum. In all such cases the personal allowance would be granted in continuation of the practice pursued in relation to the old allowance of the wife. Then you have cases where the husband and wife are living apart by mutual agreement or as the result of judicial separation under an order by a competent authority. In such cases I do not think there is really any ground for granting the husband the allowance of £225 applicable to the ordinary case, because, generally speaking, he is not being called upon to bear Income Tax in respect of that part of the income he pays in support of his wife. For instance, where the husband constitutes a charge upon his income in favour of his wife he is entitled to deduct Income Tax from the payment, and consequently bears tax only on the balance of the income which is strictly his own.

Sir E. CARSON: Is that on the Statute Book, or how does it arise?

Mr. CHAMBERLAIN: I think it follows from the Statute. I will not, however, dispute with my right hon. and learned Friend on a point of law; but it is certainly the practice.

Mr. PRETYMAN: Is the income still aggregated even when they are living apart. [HON. MEMBERS: No."] I think it is aggregated if they are not divorced, but merely not living in the same house. That is the main reason the allowance is given.

Mr. CHAMBERLAIN: My right hon. and learned Friend who first questioned me has the advantage of being a lawyer, and the hon. Gentleman who subsequently put a question tome (Mr. R. McNeill) had the advantage of being a Member of the Royal Commission which went fully into
this. My information, however, is that in cases where the two are living apart by mutual agreement or where there is a judicial separation under an order, the husband would, generally speaking, not be called upon to bear Income Tax on that part of his income which he has to pay in support of his wife.

Sir E. CARSON: What is the Statute?

Mr. CHAMBERLAIN: I will come to that later, but my right hon. Friend knows the law.

Sir E. CARSON: I do not profess to know all Acts of Parliament.

Mr. CHAMBERLAIN: Nor I. For example, where the husband constitutes a charge on his income in favour of his wife on separation he is entitled to deduct the Income Tax and pays only upon the balance of the income which he has for himself. Where the parties are permanently separated the wife is regarded as a separate individual for Income Tax purposes. She can claim the personal allowance of £135 applicable to an individual, and also any other allowance to which she my be entitled in respect of her income. If any of the three Amendments were adopted the husband would be entitled to the personal allowance of £225 applicable to a married couple, while, in addition, the wife would be able to claim the separate allowance of £135. The effect would be that a married couple living apart would receive more favourable terms than a married couple living together. I am quite sure that is not the intention of my right hon. and learned Friend and others. If, however, that explanation does not meet the whole case I shall be glad to have these various points put together, and will look into them further between now and the Report stage.

Mr. HOLMES: I think the Amendment is met by the existing practice, except in regard to a permanent separation. The case the Chancellor has cited of a couple separated by agreement, or order of the court, is a case that comes under the ordinary Income Tax law, like the cases of paying interest on dividends or annual payments. What the Chancellor is really saying is that if a man hands over to his wife a separation allowance of £70 a year she has to believe in her own mind that she is really receiving £100. She would
never look at it from that point of view. I quite agree with the Chancellor that that point is met. An agreement to separate, and also the case of a husband whose wife is in the asylum, are completely covered by the existing practice of the Inland Revenue Authorities. The only thing for the Committee to consider is where the husband and wife are permanently separated, and whether they should be allowed to be treated as if married, and the full allowance for married people given to them.

Mr. RONALD McNEILL: I do not understand the action of the Commissioners of Inland Revenue, or what the right hon. Gentleman tells us is the law. I myself know the case of a couple who, are separated by deed, or, at any rate, by agreement, and where the wife, living apart from her husband, has a very small income of her own, partly derived from the allowance of her husband and partly from investments of her own. I know that when application has been made on her behalf for the remission of Income Tax on the score that her income was below the limit, the Inland Revenue Authorities have refused to consider the case unless and until she says what is her husband's combined income. They have most consistently refused to consider the case. The woman I have in my mind has no means of ascertaining what is her husband's income, and therefore she has been for years past deprived of the right she would otherwise have of the return of Income Tax. That case appears to me to be met by the Amendment. There is a stronger case. There are many cases where couples may be living apart without any actual legal agreement or deed, but by mutual consent, and where the husband makes a voluntary allowance. This may be null in law. It is a verbal allowance to his wife. He says: "I agree to pay my wife £200 a year," or whatever it may be. That surely, for Income Tax purposes, remains part of his income? These are cases which this Amendment is intended to touch, as I understand it. My right hon. Friend says they are already covered and protection given. If so, that protection is certainly not granted by the action of the Commissioners.

Mr. CHAMBERLAIN: In answer to several queries, I may say the income is only aggregated where the couple are
living together. My hon. Friend says he knows cases of separated couples where the revenue authorities aggregate the income for the purposes of the charge. I wish he would give me particulars in order that I may investigate the matter. Only the incomes of married people who live together are aggregated, and if they are not living together their incomes are not aggregated. Where a person makes a voluntary allowance to anyone it still remains part of his income for the purpose of taxation. I shall, however, be very glad to look into this matter. There appears to be a conflict of opinion as to the treatment in the case to which the hon. Member has referred and what I am advised is the law.

Sir W. JOYNSON-HICKS: I should like to explain why I put my Amendment on the Paper. I cannot understand the Chancellor's statement. I did not put my Amendment down to deal with aggregation at all. It was intended to deal with a case of a man who has a wife in a lunatic asylum. I wrote to my right hon. Friend about a very sad case and I gave him the name and address of the person. In this case the man had a very small income and his wife was in a lunatic asylum. I asked if some allowance could not be made of the amount the husband expended on his wife in the asylum and my right hon. Friend said it was quite impossible.

Mr. CHAMBERLAIN: I said that he would be entitled to the personal allowance of £225, but not to the expenses of maintaining his wife in a hospital or asylum any more than he would be entitled for an allowance in regard to the expenses of maintaining his wife in his own home. He would be entitled to the deduction of the personal allowance.

Sir W. JOYNSON-HICKS: I think the husband who has a wife in an asylum should be entitled to the same allowance as if he has his wife living at home. I am sorry that I have not brought the letter down to which I have referred, but the right hon. Gentleman wrote to me exactly the contrary to what he has just said. I understood that in order to get the married persons allowance the husband and wife must be living under the same roof, and I put down an Amendment to over the case about which I wrote to the right hon. Gentleman.

Mr. CHAMBERLAIN: If the Committee will allow me, I will reconsider this matter between now and the Report Stage. I cannot pretend to have a direct personal knowledge of all these matters or carry them in my head, and there appears to be some misapprehension which I am afraid I cannot clear up now. If hon. Members will allow me, I shall be glad to look into the matter between now and the Report Stage.

Sir E. CARSON: As my right hon Friend is going to look into this matter, may I suggest that where these questions arise it is not satisfactory to settle the matter on the practice of the office. Where there is any difficulty it should be put in the Act of Parliament, and it should not be left open to anyone to say, "Our practice is not so and so." All taxation should be done by Act of Parliament, and I suggest to my right hon. Friend that he ought really to consider whether the Amendment before the Committee is a reasonable and proper one to have in black and white as a direction to the Commissioners. I am not sure whether I understood my right hon. Friend rightly, but he certainly astonished me when he said that if a man and his wife were living apart, and a man was making an allowance, whether voluntarily or under an order, he could deduct that from his income. That seems to me to be an extraordinary statement, and I do not know under what statute that can be done. I cannot see why, if you can do it in relation to a wife, you should not do it in relation to children or anybody else. They might say, "Here is a charge put upon my property and I am going to deduct it and not pay Income Tax on it." I feel sure that there must be some mistake in the information which has been given to my right hon. Friend.

Sir F. BANBURY: I want to raise the same point which has just been raised by my right hon. Friend and the hon. Gentleman opposite, who appear to have some knowledge of the practice in this matter. To say that it is the practice of the Department to do certain things is an entirely wrong thing. I am afraid it is rather the practice of the Inland Revenue to make a law unto themselves and to say, "We will do so-and-so," or something else, quite irrespective of whether or not the proposal which they
are prepared to sanction is laid down by Statute. There should not be any attempt on the part of any Government Department to make a law unto themselves. They should only act according to the law as made by Parliament and in no other way. This point is important, not only with regard to the Inland Revenue, but also as applied to Government Departments. I hope the Committee will thoroughly consider this matter before they accept a proposal that it should be reconsidered on Report.
What would be the effect of this Amendment? A man has relations with another woman not his wife, and his wife finds it out. She says, "I will not get a divorce because it is not coupled with cruelty. I have an allowance and I will live by myself, and you can live with this woman who is not your wife. "Under the Amendment this man would be entitled to a deduction, as far as I can make out, of£250, and he would escape the Income Tax altogether, and this on the ground that he was doing some good to the State by having married and having children, whereas, as a matter of fact, he was living in adultery with another woman, connived at by his wife and, possibly, by himself.
I was speaking yesterday upon the question of these allowances, and the Chancellor of the Exchequer said that Clause 15 was not a convenient Clause on which to discuss this matter, and that it could be considered later. I do not want to raise the whole question now. I intend to raise it on the question, "That this Clause stand part of the Bill," and I will not say anything upon the general question now as to whether these deductions should or should not be made. I earnestly trust that an Amendment of this sort, which might lead to all sorts of abuses, will not be carried, and I hope the suggestion made by my hon. Friend opposite (Sir W. Joynson-Hicks) will not be agreed to. Why should a man, because unfortunately he happens to have his wife in an asylum, be exempt? He has to pay to support his wife whether she is living at home or not. I object to all these attempts on the part of individuals to escape their just obligations to the State.

Sir W. JOYNSON-HICKS: It is admitted that if a husband and his wife are living together a certain allowance is
given to the husband, but where the husband pays for the maintenance of his wife in a lunatic asylum, all I ask is that the same allowance should be made to the husband as if she were living at home, and I do not think that is unreasonable.

Sir F. BANBURY: That is a different thing altogether. Where, through no fault of the husband or the wife, a separation occurs, I think the allowance should be made. That is a different thing altogether. May I make a suggestion not in a hostile spirit. We are now in a difficult position, because we have not got legal advice on this point. I think we ought to insist on the presence of one of the law officers in a Debate like this. We have two law officers, but we never see them here, and upon a very intricate matter like this surely one of them might attend for a few hours on two or three days when matters of this kind are being discussed. I hope the Financial Secretary will represent to the law officers that we shall be glad to have them with us on these occasions.

Sir J. BUTCHER: I wish to say a word or two upon the very important question which has been raised by my right hon. Friend the Member for Duncairn (Sir E. Carson). It is exceedingly important in a taxing Act that the practice of the Department should be strictly in accordance with the letter of the law. Otherwise the person taxed does not know what his rights really are. The Chancellor of the Exchequer told us that in this case the practice of the Department is at variance with the words of the Act, which lay down that if a man has his wife living with him he should be allowed a deduction of £225 a year. It is contended that if a man and his wife are not living together, and the wife is in a lunatic asylum, he should be entitled to the same allowance. There is a great deal to be said for the view which the hon. Member has put forward, but I hope that between this and the Report stage, in the matter of these deductions, the Chancellor of the Exchequer will consult not only the officials of his Department, but also the Law Officers, and bring the words of the Act into strict accordance with the practice of the Department, and then we shall be able to discuss whether the new words the right hon. Gentleman proposes to introduce are correct or not.

5.0 P. M.

Mr. GRIFFITHS: I agree to the suggestion of the Chancellor of the Exchequer. I would like to point out to the right hon. Member for the City of London (Sir F. Banbury) that this Amendment is based on a standard of justice. It does not matter whether a man maintains his wife at home or under a judicial separation; he still has to maintain her. However, I am willing that the matter shall stand over until the Report stage. I submit that it is a reasonable Amendment, which would do away with many complications if put into the Act in a proper form.

Amendment, by leave, withdrawn.

Mr. LAWSON: I beg to move, in Subsection (1), after the word "him" ["living with him"], to insert the words "or is a householder and is maintaining his mother."
The effect of these words, if included, would be to put a young man who is maintaining his mother in exactly the same position as a man maintaining his wife. Clause by Clause we discuss these Finance Bills, and on every possible occasion we have the widow and orphan turning up to strengthen our arguments on particular points. I think hon. Members should feel under a debt of obligation because, in this case, we have the real article to deal with. We cannot see why when a husband dies and his family lose his wages or whatever income he may have that family should not only suffer that loss, but should also be refused the consideration for Income Tax purposes which the father formerly received. Neither can we see why, for instance, if a man dies this year he receives consideration to the extent set down here—£225, and next year, when his son takes his place and has to maintain the mother, the son loses that consideration. We cannot see why the family's loss should be the Exchequer's gain. There are other reasons—based on common sense and justice—;which make us hold that this is a sound Amendment. Certainly there is considerable feeling in the country on this question. There is a good deal to be said on the ground of sentiment, and there is a very strong case indeed here for the Amendment. Each one of us must know of cases where a father has died and a son has stepped into the breach to maintain his mother. Sometimes it has
been a long-drawn out silent battle with adversity. Very often it is in a spirit of courage and chivalry that a young man faces this situation. In many cases the young man is deprived of the opportunity of marriage because of his loyalty to his mother. Altogether we think there are very real reasons for accepting this. Amendment, and I repeat we do not understand why the Exchequer should gain as a result of the family's adversity. Young men who accept obligations of this nature—there are some who do not—are the type of men who ought to be encouraged, and we move this Amendment in order to place the single young man maintaining his mother in exactly the same position as a married man maintaining his wife. The effect would be that instead of getting a personal allowance of £45 this young man would get the same allowance as a married man—namely, £225.

Mr. BALDWIN: My hon. Friend who has moved this Amendment has a very clear logical mind, but I doubt whether he sees where it carries him this afternoon. He spoke of the Exchequer reaping a profit out of domestic trouble. I think I shall be able to show that that is not the case here. If I may say so, there appears to be some confusion in the mind of my hon. Friend. Let me try and explain this allowance as I conceive it. The allowance to the married man is one thing, the allowance to the single man is another. These stand by themselves as individual allowances. In addition to these allowances there are other allowances of a comparatively small nature for dependents—for the mother and children and so forth—but they are an entirely distinct class of allowances to the two individual allowances paid to the individual taxpayer in assessing, under the new rules, his taxable income. The allowance in respect of the mother may be £45 or £25, according to the circumstances, but there is no comparable relation between the allowance to the mother and the individual allowances to which I have referred. There is no reason why a man should have the dependent allowance for the mother either increased or decreased merely because of the fact that he happens to be married or single, and the practical effect of my hon. Friend's resolution, if carried, would be very peculiar. It would add £90 per year to the amount of relief given to the
single man in respect of his mother over and above that given to the married man in respect of his mother. That is an entirely illogical position, and I am afraid we cannot see our way at this point to disturb the deduction which we have allowed for the mother, whether it be £45 or £25. I am quite sure if my hon. Friend with his clear mind keeps it clearly in view that there is no relation between the individual allowances and the allowances given to dependents, he will see that, although his proposal would be a very great concession to one individual in one set of circumstances, it is one he can hardly expect us to accede to.

Mr. PRETYMAN: I think the strongest argument against giving the same allowance to the single man maintaining his mother as to the man maintaining his wife is that there is no aggregation in that case. The principal reason for giving the allowance in the case of the married couple is the aggregation. There is no aggregation in the case of people living together who are not married, and therefore cannot be treated on the same basis. If there is to be any increase allowed for a mother living with the son it would be better dealt with on the general question of allowances which will come up on another Clause. This whole matter was gone into before the Income Tax Commission and the point of view put forward by my hon. Friend opposite (Mr. Lawson) was considered, but we felt that we could not go any further than we did.

Mr. W. GRAHAM: I am very much disappointed at the reply of the Financial Secretary to the Treasury. As another Member of the Royal Commission, may I say that this is one of the parts of the Report with which I personally disagreed, and although, with my right hon. Friend opposite, I signed the general statement, I would point out that it included a great deal on which it was impossible to make the minor reservations which we had in mind? What is the position? By this Amendment we are seeking to put the unmarried man who happens to maintain his mother in the same position as a married couple who receive exemption now at the rate of £250 per annum. Undoubtedly there are certain practical difficulties in the way. There is this difficulty, for
example: You may have one or two sons jointly maintaining the mother. A practical difficulty of that kind can be easily overcome, and I am prepared to look beyond such difficulties to the actual position as we find it mainly among the industrial and professional classes in this country. No Member of this House would be prepared to dispute that the position in many homes in which there is a son with an aged mother to maintain is undeniably harder than the position in a home in which there happen to be only a married couple. For the most part the young married couple, enjoying an exemption of £250, have health, strength, and ability to work, but in a large number of the cases covered by this Amendment the mother or aged person is incapacitated from work, and requires special nourishment and consideration, which throw a severe strain on the resources of the son to maintain her. I think, from the point of view of hardship, therefore, a very good case can be established for this Amendment. I gather that the Financial Secretary to the Treasury indicated that this proposal would upset the structure of the allowances under the Income Tax laws or recommendations. There may be something to be said for that argument, but may I point out what the Finance Bill itself provides in the matter of allowances for dependents and relatives? There are two allowances for a dependent mother, namely, £45 per annum and £25 per annum. The allowance of £45 is dependent upon there being young sisters or brothers to maintain, and upon their remaining in the home for that purpose. The allowance is never given where that condition is not in force. The other allowance of £25, which is awarded to a son in this position, is only given when the aged parent is incapacitated by ill-health or infirmity.

Mr. PRETYMAN: I think not. I am referring to Clause 21.

Mr. GRAHAM: I understood that that condition was attached; but, even if it is not attached, the allowance of £25 is altogether insufficient. I think there is a broader point of principle to be considered in connection with this matter. I took the view, after hearing all the evidence given before the Royal Commission, that, while we had established a very generous allowance for married couples, the scheme of recommendations which we had pro-
posed for the acceptance of the Chancellor of the Exchequer did not do complete and real justice to those people who were single, but had dependent relatives to maintain. That is one of the undeniable weaknesses of the Income Tax structure of this country. It is generous to married couples and to married people with children, but it is not proportionately generous to people who are single and have dependent relatives to maintain. This Amendment would meet in a plain and simple manner at least a part of that difficulty, and I am hoping that we shall not pass from it this afternoon without receiving some further satisfaction and some promise from the Chancellor of the Exchequer.

Sir WILLIAM BARTON: It seems to me that this proposal, in its present form, is one-sided. It says, "A householder supporting his mother"; but supposing that the householder were a daughter, it would be absolutely unfair that, while a son on whom family responsibilities devolved would be favoured under the Finance Bill, a daughter who, as is not infrequently the case, has the same responsibility should be charged.

Mr. GRAHAM: The word "householder" would cover the case of a daughter.

Mr. H0LMES: I hope the Chancellor of the Exchequer will further consider this proposal. I desire to draw attention to the fact that it is very limited in its scope. It does not mean that every son who is contributing to the support of a widowed mother is going to get additional benefit. The son has to remain single; otherwise he does not get the relief. I think everyone desires, as far as possible, to assist a man who devotes himself to supporting his widowed mother, often at much self-sacrifice on his part. The number of these cases throughout the country must be very limited, and it will not cost more than a few thousands a year. There is no doubt that men who

have taken upon themselves the responsibility of taking a house and supporting a widowed mother do feel that, as compared with married men, they are badly treated by the Inland Revenue Department in not getting the full allowance.

Mr. CHAMBERLAIN: I venture to appeal to the Committee to bear in mind the broad effect of such concessions as those pressed in this and in the previous and coming Amendments. I beg the Committee to remember that the whole of the Clauses before the House are in themselves a concession to the poorer taxpayers. We are apt, sometimes, to listen to the dictates of our hearts rather than of our heads It is my disagreeable duty to ask the Committee to use its head, and to consider where the impulse of its heart, when a hard case is being brought forward, will land us eventually. I should like to show the Committee in general terms what is the effect of these Clauses. We have followed in every case the recommendations of the Royal Commission, except in some very minor matters, where we have varied their recommendation in favour of the taxpayer, in order to simplify the collection of the tax. The scheme which the Royal Commission recommends, and which this Bill carries into effect, will cost the State something like£18,000,000, of which £16,000,000 goes to people with incomes below £2,000. This part of the Bill, as will be seen, is really in itself a great concession to people with small incomes. I beg hon. Members of the Committee to receive it in that spirit. It is not easy to make such concessions even as that, in the midst of financial pressure, and I beg hon. Members not to take that as a jumping-off point from which to launch complaints against the Chancellor of the Exchequer or the Government. I trust that they will help me in my very difficult task, or, at any rate, will not make it more difficult.

Question put, "That those words be there inserted."

The Committee divided: Ayes, 78; Noes, 240.

Division No. 192.]
AYES.
[5.25 p.m.


Bagley, Captain E. Ashton
Briant, Frank
Entwistle, Major C. F.


Barnes, Major H. (Newcastle, E.)
Bromfield, William
Galbraith, Samuel


Barton, Sir William (Oldham)
Carr, W. Theodore
Glanville, Harold James


Bell, James (Lancaster, Ormskirk)
Casey, T. W.
Graham, W. (Edinburgh, Central)


Bottomley, Horatio W.
Clynes, Rt. Hon. J. R.
Griffiths, T. (Monmouth, Pontypool)


Bowerman, Rt. Hon. Charles W.
Cowan, D. M. (Scottish Universities)
Grundy, T. W.


Bowyer, Captain G. E. W.
Davies, A. (Lancaster, Clitheroe)
Guest, J. (York, W. R., Hemsworth)


Bramsdon, Sir Thomas
Davison, J. E. (Smethwick)
Hallas, Eldred


Hayday, Arthur
Myers, Thomas
Taylor, J.


Hayward, Major Evan
Newbould, Alfred Ernest
Thomas, Brig.-Gen. Sir O. (Anglesey)


Herbert, Hon. A. (Somerset, Yeovil)
Newman, Sir R. H. S. D. L. (Exeter)
Thomson, T. (Middlesbrough, West)


Hirst, G. H.
O'Grady, Captain James
Thorne, G. R. (Wolverhampton, E.)


Hodge, Rt. Hon. John
Palmer, Charles Frederick (Wrekin)
Tootill, Robert


Hogge, James Myles
Parkinson, Albert L. (Blackpool)
Walton, J. (York, W. R., Don Valley)


Holmes, J. Stanley
Rae, H. Norman
Warren, Lieut.-Col. Sir Alfred H.


Irving, Dan
Rendall, Athelstan
Waterson, A. E.


Johnstone, Joseph
Richardson, R. (Houghton-le-Spring)
Wedgwood, Colonel J. C.


Kelley, Major Fred (Rotherham)
Roberts, Frederick O. (W. Bromwich)
White, Charles F. (Derby, Western)


Kenyon, Barnet
Scott, A. M. (Glasgow, Bridgeton)
Wignall, James


Lambert, Rt. Hon. George
Sexton, James
Williams, Aneurin (Durham, Consett)


Law, Alfred J. (Rochdale)
Short, Alfred (Wednesbury)
Wilson, Rt. Hon. J. W. (Stourbridge)


Lunn, William
Simm, M. T.
Wood, Hon. Edward F. L. (Ripon)


Lyle-Samuel, Alexander
Sitch, Charles H.
Wood, Major M. M. (Aberdeen, C.)


Maclean, Neil (Glasgow, Govan)
Stanton, Charles B.
Young, Robert (Lancaster, Newton)


Mills, John Edmund
Sturrock, J. Leng



Murray, Dr. D. (Inverness & Ross)
Swan, J. E.
TELLERS FOR THE AYES.—


Murray, John (Leeds, West)
Sykes, Sir Charles (Huddersfield)
Mr. Frederick Hall and Mr. Lawson.


NOES.


Adair, Rear-Admiral Thomas B. S.
Dawes, Commander
Jones, Henry Haydn (Merioneth)


Agg-Gardner, Sir James Tynte
Dennis, J. W. (Birmingham, Deritend)
Jones, J. T. (Carmarthen, Llanelly)


Ainsworth, Captain Charles
Dockrell, Sir Maurice
Jones, William Kennedy (Hornsey)


Amery, Lieut.-Col. Leopold C. M. S.
Du Pre, Colonel William Baring
Joynson-Hicks, Sir William


Armitage, Robert
Falle, Major Sir Bertram G.
Kidd, James


Ashley, Colonel Wilfrid W.
Farquharson, Major A. C.
Kinloch-Cooke, Sir Clement


Astbury, Lieut.-Commander F. W.
Fell, Sir Arthur
Larmor, Sir Joseph


Baird, Sir John Lawrence
FitzRoy, Captain Hon. E. A.
Law, Alfred J. (Rochdale)


Baldwin, Rt. Hon. Stanley
Flannery, Sir James Fortescue
Law, Rt. Hon. A. B. (Glasgow, C.)


Balfour, George (Hampstead)
Foreman, Henry
Lewis, Rt. Hon. J. H. (Univ., Wales)


Banbury, Rt. Hon. Sir Frederick G.
Foxcroft, Captain Charles Talbot
Lloyd, George Butler


Banner, Sir John S. Harmood-
Fraser, Major Sir Keith
Lloyd-Greame, Major Sir P.


Barnston, Major Harry
Fremantle, Lieut.-Colonel Francis E.
Locker-Lampson, G. (Wood Green)


Beckett, Hon. Gervase
Gange, E. Stanley
Locker-Lampson, Com. O. (H'tingd'n)


Bell, Lieut.-Col. W. C. H. (Devizes)
Ganzoni, Captain Francis John C.
Macdonald, Rt. Hon. John Murray


Bellairs, Commander Cariyon W.
Gardiner, James
Mackinder, Sir H. J. (Camlachle)


Benn, Sir A. S. (Plymouth, Drake)
Gardner, Ernest
McLaren, Robert (Lanark, Northern)


Benn, Capt. Sir I. H., Bart.(Gr'nw'h)
Gibbs, Colonel George Abraham
M'Micking, Major Gilbert


Betterton, Henry B.
Gilbert, James Daniel
Macnamara, Rt. Hon. Dr. T. J.


Bigland, Alfred
Gilmour, Lieut.-Colonel John
McNeill, Ronald (Kent, Canterbury)


Bird, Sir A. (Wolverhampton, West)
Glyn, Major Ralph
Mallalieu, F. W.


Blair, Reginald
Goff, Sir R. Park
Malone, Major P. B. (Tottenham, S.)


Boscawen, Rt. Hon. Sir A. Griffith-
Grant, James A.
Marriott, John Arthur Ransome


Bowles, Colonel H. F.
Green, Joseph F. (Leicester, W.)
Martin, Captain A. E.


Breese, Major Charles E.
Greig, Colonel James William
Matthews, David


Bridgeman, William Clive
Gretton, Colonel John
Meysey-Thomson, Lieut.-Col. E. C.


Briggs, Harold
Guinness, Lieut.-Col. Hon. W. E.
Middlebrook, Sir William


Broad, Thomas Tucker
Gwynne, Rupert S.
Mond, Rt. Hon. Sir Alfred M.


Brown, Captain D. C.
Hallwood, Augustine
Montagu, Rt. Hon. E. S.


Buchanan,Lieut.-Colonel A. L. H.
Hall, Lieut.-Col. Sir F. (Dulwich)
Moore, Major-General Sir Newton J.


Buckley, Lieut.-Colonel A.
Hall, Rr-Adml Sir W. (Liv'p'l,W.D'by)
Moreing, Captain Algernon H.


Bull, Rt. Hon. Sir William James
Hambro, Captain Angus Valdemar
Morrison, Hugh


Burdon, Colonel Rowland
Hanson, Sir Charles Augustin
Mosley, Oswald


Burn, Col. C. R. (Devon, Torquay)
Harmsworth, C. B. (Bedford, Luton)
Mount, William Arthur


Butcher, Sir John George
Harris, Sir Henry Percy
Murchison, C. K.


Campbell, J. D. G.
Haslam, Lewis
Murray, Lieut.-Colonel A. (Aberdeen)


Carew, Charles Robert S.
Henderson, Major V. L. (Tradeston)
Murray, C. D. (Edinburgh)


Carson, Rt. Hon. Sir Edward H.
Hennessy, Major J. R. G.
Murray, Dr. D. (Inverness & Ross)


Carter, R. A. D. (Man., Withington)
Henry, Denis S. (Londonderry, S.)
Murray, Major William (Dumfries)


Cautley, Henry S.
Herbert, Dennis (Hertford, Watford)
Nall, Major Joseph


Cayzer, Major Herbert Robin
Hills, Major John Waller
Neal, Arthur


Cecil, Rt. Hon. Evelyn (Birm., Aston)
Hinds, John
Nicholson, William G. (Petersfield)


Cecil, Rt. Hon. Lord H. (Ox. Univ.)
Hoare, Lieut.-Colonel Sir S. J. G.
Nield, Sir Herbert


Chadwick, Sir Robert
Holbrook, Sir Arthur Richard
Norris, Colonel Sir Henry G.


Chamberlain, Rt. Hn. J. A. (Birm., W.)
Hood, Joseph
Oman, Sir Charles William C.


Chamberlain, N. (Birm., Ladywood)
Hope, Sir H. (Stirling &' Cl'ckm'nn'n,W.)
O'Neill, Major Hon. Robert W. H.


Clough, Robert
Hopkins, John W. W.
Palmer, Major Godfrey Mark


Coates, Major Sir Edward F.
Hopkinson, A. (Lancaster, Mossley)
Palmer, Brigadier-General G. L.


Coats, Sir Stuart
Horne, Sir R. S. (Glasgow, Hillhead)
Peel, Col. Hn. S. (Uxbridge, Mddx.)


Cockerill, Brigadier-General G. K.
Hotchkin, Captain Stafford Vere
Perkins, Walter Frank


Cohen, Major J. Brunel
Howard, Major S. G.
Perring, William George


Cooper, Sir Richard Ashmole
Hudson, R. M.
Philipps, Gen. Sir I. (Southampton)


Cope, Major Wm.
Hunter, General Sir A. (Lancaster)
Pilditch, Sir Philip


Cory, Sir J. H. (Cardiff, South)
Hunter-Weston, Lieut-Gen. Sir A. G.
Pownall, Lieut.-Colonel Assheton


Craig, Colonel Sir J. (Down, Mid)
Hurst, Lieut.-Colonel Gerald B.
Pratt, John William


Craik, Rt. Hon. Sir Henry
Illingworth, Rt. Hon. A. H.
Pretyman, Rt. Hon. Ernest G.


Curzon, Commander Viscount
James, Lieut.-Colonel Hon. Cuthbert
Pulley, Charles Thornton


Dalziel, Sir D. (Lambeth, Brixton)
Jephcott, A. R.
Purchase, H. G.


Davidson, Major-General Sir J. H.
Jellett, William Morgan
Randles, Sir John S.


Davies, Major D. (Montgomery)
Jesson, C.
Ratcliffe, Henry Butler


Davies, Thomas (Cirencester)
Jodrell, Neville Paul
Raw, Lieut.-Colonel N.


Davison, Sir W. H. (Kensington, S.)
Jones, Sir Evan (Pembroke)
Rawlinson, John Frederick Peel


Rees, Sir J. D. (Nottingham, East)
Smithers, Sir Alfred W.
Whitla, Sir William


Remer, J. R.
Sprot, Colonel Sir Alexander
Wigan, Brig.-Gen. John Tyson


Remnant, Sir James
Stanley, Major H. G. (Preston)
Willey, Lieut.-Colonel F. V.


Roberts, Sir S. (Sheffield, Ecclesall)
Steel, Major S. Strang
Williams, Lt.-Com. C. (Tavistock)


Robinson, S. (Brecon and Radnor)
Stewart, Gershom
Williams, Col. Sir R. (Dorset, W.)


Robinson, Sir T. (Lancs. Stretford)
Sugden, W. H.
Willoughby, Lieut.-Col. Hon. Claud


Rodger, A. K.
Surtees, Brigadier-General H. C.
Wills, Lieut.-Colonel Sir Gilbert


Rogers, Sir Hallewell
Sutherland, Sir William
Wilson, Capt. A. S. (Holderness)


Roundell, Colonel R. F.
Talbot, G. A. (Hemel Hempstead)
Wilson, Daniel M. (Down, West)


Royden, Sir Thomas
Terrell, George (Wilts, Chippenham)
Wilson, Lieut.-Col. M. J. (Richmond)


Samuel, A. M. (Surrey, Farnham)
Thomas, Sir Robert J. (Wrexham)
Wolmer, Viscount


Samuel, Rt. Hon. Sir H. (Norwood)
Thomas-Stanford,
Charles Wood, Major S. Hill- (High Peak)


Sanders, Colonel Sir Robert A.
Thorpe, Captain John Henry
Yeo, Sir Alfred William


Seager, Sir William
Townley, Maximilian G.
Young, Lieut.-Com. E. H. (Norwich)


Seddon, J. A.
Tryon, Major George Clement
Young, Sir Frederick W. (Swindon)


Shaw, William T. (Forfar)
Turton, E. R.
Young, W. (Perth & Kinross, Perth)


Shortt, Rt. Hon. E. (N'castle-on-T.)
Waddington, R.
Younger, Sir George


Smith, Sir Allan M. (Croydon, South)
Weston, Colonel John W.



Smith, Harold (Warrington)
White, Lieut.-Col. G. D. (Southport)
TELLERS FOR THE NOES.—




Lord E. Talbot and Mr. Parker.

Mr. G. LOCKER-LAMPSON: I beg to move, at the end of Sub-section (2) to add the words, "except when the joint income of husband and wife does not exceed five hundred pounds, in which case this additional allowance shall not exceed one hundred and thirty-five pounds."
My object is really to put back married people with small incomes in at least as good a position as they were in before the Bill passed into law. The Chancellor of the Exchequer said just now that the Bill was really giving concessions to the poorer Income Tax payer, and he asked us not to pile on these concessions, and not to ask for additional benefits. But this Clause does not give additional benefits to poor Income Tax payers. It is really putting them in a worse position than they are under the existing Act. Under Section 28 of the Consolidated Income Tax Act, 1918, where a man and woman are married, with an income of not more than £500 a year, and the wife's income is earned, they are separately assessed—it is the only case in which husband and wife are separately assessed—and the wife generally gets off paying any Income Tax whatsoever. But under the present proposal the incomes of husband and wife, even if they are in the aggregate not more than £500 a year, and they arc both earning their incomes, are aggregated, they are not separately assessed, and the wife can only get relief up to £45. I should like to take an instance in order to show how this will work out. Supposing a man has an earned income of £120 and an unearned income of £250, and supposing the wife has an earned income of £120, they have a total income of £490. Under this Bill, if that couple does not happen to have any children they get a relief of £294, which leaves a taxable income of £196.
The wife's share of that is about £63, and she will have to pay under this Clause a 3s. tax on £63. Under the existing law she would not have to pay any tax at all, because the aggregate income is under £500 a year, both people earning their income and the wife earning the whole of hers. I should have thought that at any rate in this case the House ought to insist that instead of worsening the situation of people with very low-earned incomes, it should remain the same. I am not asking that their situation should be improved. I am asking that you should still give the wife the advantage of not having to pay any Income Tax as a rule when the aggregate income is not more than £500 a year and both incomes are earned.

Mr. CHAMBERLAIN: I hope my hon. Friend will not feel it necessary to press the Amendment. It is true there may be cases in which less relief is given than under the present law; but, speaking broadly, what I said is true, that the effect of the change of the law is to extend relief and not to limit it. It may operate the other way in a particular case, but it is generally favourable to the taxpayer and not to the Treasury. The matter came before the Commission and they specifically recommended that the relief in its present form should be discontinued and that this new relief should be substituted for it. It is impossible to check particular cases presented across the floor of the House, but I know my hon. Friend's care and I have no doubt the case he has presented is accurately stated. But let me illustrate the general working by another case. Take a husband and wife who earn £250 and £150 respectively. Let us eliminate children for the sake of simplicity. Under last year's Income Tax law they would be charged
tax on £110. On my present proposal they will be charged tax on £90. Under my hon. Friend's proposal they will escape tax altogether. But the relief under Section 21 of the Income Tax Act was conditional on the total joint income of the husband and wife not exceeding £500. Under the proposal of the Commission, which I have adopted, there is no such condition, and a new provision removes the old restriction under which no relief was available where the income of the wife was derived from a share in the profits of a business carried on jointly by the husband and wife or from a salary paid by the husband for the wife's services in the business. The sole condition now is that the wife shall be in receipt of an earned income. The effect of the change is generally favourable to the class in which my hon. Friend is interested, and I hope he will not press the Amendment.

Mr. HOLMES: I can quite understand that the right hon. Gentleman wants generally to follow the recommendations of the Royal Commission, but surely it is one of the privileges of Members of the House to point out where small hardships will ensue if that is carried out, and I think the hon. Member (Mr. Locker-Lampson) has done a great service in discovering this particular point. The right hon. Gentleman's argument is, "It may be a hardship here, but, generally speaking, we have improved the position of poor people." There are a number of married people who go to work, and between them earn less than £500 a year, who at present get relief under Section 21 of the Act of 1918. It will be no consolation to them to be told, when they are assessed for the present year and have to pay more, that they are not going to get so much concession as they always have had in the past, but they will be glad to know that certain other people are getting more concession than they did before. I can understand the right hon. Gentleman saying that these Amendments that are suggested are not much in themselves, but they are always taking something away from the Revenue. The last one we divided upon would not have cost the Revenue more than £20,000. This particular one would probably not cost more than that sum per year, if so much, but it will be a hardship to these people who have had this concession for years to
have it taken away from them, and I hope the hon. Member will press it.

Sir F. HALL: I quite appreciate the difficulty the right hon. Gentleman is in. He says, "As the Bill is drawn there will be a benefit to a larger number, but I admit that it will worsen the position of others." I am sure he appreciates how difficult it is for people who have their position worsened at any time, and particularly in the times through which we are passing, and it is not equitable that these people should be in a worse position than under the present law. Surely he can bring up some words between now and Report which will cover the hard cases in order that people who are getting benefit at present shall continue to get it. If he will undertake to do that, I am sure my hon. Friend would be prepared to withdraw the Amendment. If he cannot, I trust my hon. Friend will press it to a Division. I hope it will not be necessary, because I am sure the right hon. Gentleman appreciates the position in which these people are placed with the enormous increase in the cost of living and the heavy tax they have to pay. Surely these are not times in which you should put heavier burdens upon them.

Mr. CHAMBERLAIN: I appreciate the spirit in which the hon. and gallant Gentleman has spoken. In the whole series of Amendments there is no absolute logical basis for any figure of exemption or relief. Every time a concession is made it is used as an argument for a further concession, either for the same person or for other persons. I believe that the best thing to do, without prejudice and in spite of the loss of money, is to accept the considered opinion of so expert and careful a body of men as the Royal Commission and to stand by that. I do not believe there is any other safe standing ground. It is perfectly true that the Report of the Royal Commission does not affect the discretion of this House, and I quite see the appeal to hon. Members of the point of view that, in making a general rule, we should not worsen the position of any individuals. That is incompatible with the Report of the Royal Commission, or with any attempt to deal on settled principles with Income Tax reform. If it were simply in this case that the principle could be adopted without reference to any other
case, there would be a good deal to be said for the hon. Member's case, but one of the objects of the Royal Commission is to get rid of the sudden jump in the Income Tax scale. Instead of having a smoothly ascending line, according as income rises, you have steep steps, and you cannot level off the steep steps except by adding a little to the burden immediately below, while alleviating the burden immediately above. I cannot, however, accept the principle which my hon. Friend asks me to adopt, and to say that in adopting the changes generally nobody shall be worse off. I can only say that the general effect on the lower classes of Income Tax payers is that of considerable relief.

Lieut.-Colonel Sir F. HALL: I realise the difficulties under which the right hon. Gentleman is labouring, and I appreciate, and the country will appreciate, the amount of work which has been done by members of the Royal Commission; but when you find a case such as this where people are going to be in a worse position than they are to-day, it is not asking for the work of the Royal Commission to be upset to suggest that in this one case these people should not be put in a worse position.

Mr. LOCKER-LAMPSON: This is the only case.

Sir F. HALL: That confirms my opinion. Under the circumstances something might be done for this one case. It is said you cannot legislate for everybody, but the Chancellor of the Exchequer is practically legislating for everybody else, but not for the single case in which these people are going to be worse off than they are at the present time. Some words might be found which would meet the case.

Mr. LOCKER-LAMPSON: There is nothing I should like better than to meet the wishes of my right hon. Friend in every possible way. Although I do not want to press for a Division this, so far as I am aware, is the only case in which people with very low incomes are worsened under this Bill, and I shall feel compelled to press the matter. There may be other cases, but this is the only one I can find, and I cannot believe that it will be any great cost to the Exche-
quer. I am not asking for any extra, advantage to be given. All that the Amendment does is to put them in the position which they have held up to the present time. Therefore, it really will not cost the Exchequer any extra money or, at any rate, very little. I feel strongly about this matter, because I have read. the Report of the Royal Commission very carefully, and the whole idea of the Commission in regard to this point was that the incomes should not be separately assessed. They wanted husband and wife to have their incomes aggregated. throughout, and by taking that general principle they have by accident knocked, out this very important privilege which hitherto has been enjoyed by people with very low incomes.

Sir R. NEWMAN: If we are to go to a Division, will the Chancellor of the Exchequer deal with the statement that these are the only people of small incomes who will suffer by the change in the Income Tax system? If that is so, it must influence a good many Members. I sympathise with the Chancellor of the Exchequer. We must get the money, but if we are going to alter the incidence of our Income Tax, it is rather hard that the only class that should be singled out. to have increased taxation should be the man and wife who have a small income like £500. There are a great many people who have small fixed incomes of about £500. I was rather alarmed by what the right hon. Gentleman said, if it is correct, that he is going to stick absolutely to the Report of the Royal Commission on Income Tax. Although we have great respect for those gentlemen, I should like to feel that the Chancellor of the Exchequer brings a little of his own judgment to bear upon the matter, otherwise we should know what he was going to accept or refuse by merely reading the Report of the Royal Commission, and without having any discussion at all.

Lieut.-Colonel WILLOUGHBY: I think we are entitled to some further explanation on this point.

Mr. CHAMBERLAIN: I was about to rise when the hon. Member rose.

Lieut.-Colonel WILLOUGHBY: In that case I will not proceed.

Mr. CHAMBERLAIN: The general effect of the Bill is very largely to extend
the relief given to the people with small incomes at the expense of people with large incomes. At certain stages in the adjustment, some charge is added to people who have hitherto, owing to an accident, got relief disproportionate to that given to others in analogous positions, but the main effect is to extend the relief. My hon. Friend (Mr. G. Locker-Lampson) says that his Amendment could only mean a trifling sum. It will mean £500,000, and if there is £500,000 to give away this is really not the case in which to give it.

Mr. LOCKER-LAMPSON: It is not half a million given away.

Mr. CHAMBERLAIN: Yes, it is.

Mr. LOCKER-LAMPSON: You are taking half a million away.

Mr. CHAMBERLAIN: If I went back to the old system, and rejected the recommendation of the Royal Commission, that would be a different position; but to graft my hon. Friend's proposal on to the proposals of the Royal Commission means a loss of £500,000.

Question put, "That those words be there added."

The Committee divided: Ayes, 96; Noes, 232.

Motion made, and Question proposed, "That the Clause, as amended, stand part of the Bill."

6.0 P.M.

Sir F. BANBURY: Under the policy which is now being adopted a very large number of people will in future be exempt from bearing any of the burden of Income Tax. As I understand the position, a married man with an income of less than £250 a year does not pay any Income Tax, and neither does a single man with an income of less than £150 a year. This is a step in the wrong direction. The Chancellor of the Exchequer has informed me that the result of these concessions would be to reduce the number of Income Tax payers approximately to 2,450,000 out of a population of some 45,000,000, a large pro-
portion of whom under the last Franchise Act have votes. These people though paying no Income Tax can select candidates for Parliament and obtain from them pledges with regard to the imposition of taxes, and they may obtain pledges that may benefit that very large class at the expense of the small class, with the result that large burdens may be thrown on the small class for the benefit of people who are not contributing a farthing to the expenditure.
That is a very serious state of affairs. There has been an enormous increase in the amount spent on education, on unemployed benefit and subsidies for bread and all kinds of things, and privileges are given to these people who have voting power and do not pay a
single farthing to the expenditure which through their Members they compel the House to incur. How long is that going on? Even before the Coalition, when Mr. McKenna was Chancellor of the Exchequer, and a Radical Government was in power, we had a proposal which was adopted not for increasing exemption, but for reducing it, and as far as I remember the limit of exemption was reduced from £160 to £130 and that met with the unanimous approval of a House which could not be said to represent exclusively or indeed to any extent the propertied classes. Now when we are face to face with warlike expenditure in time of peace, have we any proposals which would bring home to the vast majority of people what the result of all this expenditure is? On the contrary we have proposals to relieve the bulk of people from the main source of taxation which goes to provide all these various expenditures. Income Tax, Super-tax and Death Duties, from which the vast majority of the people are relieved, do form a very considerable proportion of the whole taxation of the Country. I suppose it is too late to ask the Chancellor of the Exchequer to reconsider his decision. His answer is that the Royal Commission on Income Tax did recommend some such course. I believe that it did, but I do not believe that it is necessary to assume that a Royal Commission, even with my right hon. Friend (Mr. Pretyman) upon it, is always infallible. In this particular case I think that it has made a mistake.
Economists for many years have held that if you arrive at a point when you tax the few for the benefit of the many, you come to a very serious crisis in the history of the country where such a thing exists. I see opposite an hon. and gallant Gentleman (Major-General Sir N. Moore) who has some connection with our Dominions over the seas, and, if I am not mistaken, something of that sort has arisen at various times in the Dominions, and the evil of it has been recognised. What steps have been taken to amend it, I cannot say. I do earnestly ask the Committee to pause before sanctioning a proposal of this sort. Under the Parliament Act of 1911, the House of Lords, which in many cases during the history of this country has shown great wisdom when crises have arisen, has not any longer any power over financial matters.
Therefore, the responsibility resting on us is greater than ever before. I am certain that the Chancellor of the Exchequer in his heart desires to do everything he can to reduce the enormous expenditure of the country, but I do not think that the bulk of the people realise what is going to happen if this enormous expenditure continues. The only way to bring home to them what is going on now, if they desire to have all these various advantages—increase of old age pensions, increase of pre-War pensions, free education, regardless of cost—and if the State is to subsidise this, that and the other, then—

Mr. R. RICHARDSON: And provide red coats!

Sir F. BANBURY: The provision of red coats, in my opinion, is likely to lead to economy.

Dr. MURRAY: Mesopotamia!

Sir F. BANBURY: I do not want to be drawn by any red herring. I believe that the provision of red coats will make the Army more attractive, and may do away with the necessity of increasing the pay of the soldier. You have to get your Army. The only way to bring expenditure home to the people, who, for good or for evil, have in their hands the destiny of the country, is to make them bear, every one of them, a share of the expense to which they themselves agree.

Colonel WEDGWOOD: The right hon. Baronet is always right, but, I think that on this occasion he is a little too pessimistic. In the last three years, and particularly in the last year, the people have had an education that they never had before, and they are not likely to forget it. The right hon. Gentleman thinks that unless you impose direct taxes upon the people they will not realise what they have to pay. They have learned very effectively curing the past year that they have to pay. Every time the Government goes in for a little additional expenditure they find that the cost of living goes up. They are realising acutely that every time wages are paid, whether it be the wages of the miners or of the railway workers, the cost of living goes up. They are learning political economy much more quickly than did the upper and middle classes. Above all things, they are learning that it, is not the person
who first pays a tax, the person who actually puts down the cash, who ultimately pays the tax. It is the indirect effect of taxation that really hits them. After all, we pay this Income Tax, but we know that we do not really pay it; we pass it on, you and I. [HON. MEMBERS: "How "]. I invest money. I bought a few shares the other day. I found I was able to get 8 per cent. for my money with exactly the same security as would have brought me in 5 per cent. six years ago. As a result, I do not pay Income Tax on that. It is paid for by the people who require the money I have to lend. The people who want my capital have to pay the Income Tax which I hand over to the Treasury, which means that the whole of that Income Tax falls upon the cost of production and is transferred to the consumer of the article made with the money I lend. Capitalists do not pay the Income Tax; the consumer pays it in the long run. That is why I think the right hon. Baronet over-estimates the importance of direct payment of taxes. We are coming to realise that the capitalist is wonderfully agile in shifting the burden of the taxes on to other people. I think he may rest assured that the ordinary elector, and particularly the woman elector knows that it is the workers who pay in the long run all the taxes that are imposed.

Captain ELLIOT: I do not propose to follow the last two speakers into their usurious adventures with the money of the capitalist and the Income Tax which the hon. Member opposite grinds out of the pockets of the widows and orphans. I think that the last speaker proves rather too much. If it does not matter how much taxation is placed on the capitalist, because the capitalist will always get out of it, it seems to me that the Chancellor of the Exchequer might as well transfer the whole of taxation to the working classes, who, by his hypothesis, have to pay anyway. To say that was not the purpose for which I rose. On a point of definition I am not quite clear whether "wife" includes "husband" and whether the female sex includes the male sex. I understand that as a rule in an Act of Parliament "man' nowadays includes " woman," and "he" includes "she."

Captain BOWYER: I welcome this Clause. It seems to me that the right
hon. Member for the City of London (Sir F. Banbury) forgot that the voters who pay no Income Tax at least pay very large sums in indirect taxation. If we had a scheme whereby everybody without exception paid direct taxes I think that would be the best plan, but so long as you have direct and indirect taxes you must have exemptions.

Mr. A. M. SAMUEL: The hon. Member who has just spoken argued that those who pay no direct taxation contribute towards the upkeep of the State by indirect taxation. The £350,000,000 to be raised by Customs and Excise are the form of indirect taxation to which he probably referred. Part of that sum is paid by direct taxpayers also. Although the working classes may pay a very large sum in indirect taxation, under Customs and Excise, out of the £350,000,000 for a normal year, I find they receive back in Education, in Old-age Pensions, in the benefits of the Ministry of Health, in Housing, in War pensions and other things, a total of £259,000,000. I make no point one way or the other as to whether that is right or wrong, but we ought not to let it go forth unchallenged that those who pay no direct taxation but pay indirect taxes do not receive more back in benefits than they pay in indirect taxation. It would be correct to say that for every penny of indirect taxation paid by the workers they receive back a pennyworth of benefit; consequently the burden of the upkeep of the State does not fall upon them, and that fact should be recognised.

Mr. R. RICHARDSON: I admire the outspokenness of the right hon. Baronet (Sir F. Banbury). He is, at least, honest in his convictions. I would like to point out to him that indirect taxation falls very heavily indeed upon the working classes. Take a man with less than £250 a year and compare him with a man with £10,000 a year. If the poorer man wants to put a stamp on a letter he has to pay the same amount as the richer man. I desire to see a single tax, and that would be an Income Tax. It would be fair to everyone concerned.

CLAUSE 28.—(Computation of profits and gains for purposes of Income Tax in relation to Corporation Profits Tax.)

Paragraphs (1),(2) and (3) of Rule four of the Rules applicable to Cases I. and II. of Schedule D (which provides for adjustment of Income Tax in cases where Excess Profits Duty has been paid), shall have effect as if references therein to Excess Profits Duty included Corporation Profits Tax.

Motion made, and Question proposed, "That the Clause stand part of the Bill."

Lieut. - Commander KENWORTHY: Might we have a word of explanation?

Mr. BALDWIN: This Clause means exactly what it says. In the calculation of Income Tax the Corporation Profits Tax is deducted in the same way as the Excess Profits Duty.

Colonel WEDGWOOD: That is not enough. I think everyone in this Committee is uncertain how the Corporation Profits Tax is to be deducted. Is it to fall solely on one class of shares, and, if so, how is this Clause to be interpreted?

Mr. BALDWIN: That is a point which surely must arise when we come to discuss
the Clause dealing with the Corporation Profits Tax.

Sir F. BANBURY: This Clause says
"shall have effect as if references therein to Excess Profits Duty included Corporation Profits Tax."
Supposing, when Clause 44, which deals with the Corporation Profits Tax, is reached, the Committee reject that Clause, what is going to happen to this Clause, which contains a reference to something which is afterwards rejected? I hope we are not, by assenting to this, going in any way to prejudice our power to reject the Corporation Profits Tax, when we come to it.

Mr. BALDWIN: Of course not.

Sir F. BANBURY: If the Corporation Profits Tax is rejected—personally, I hope it will be greatly modified, if not rejected altogether—it will look a little curious to see a reference in an Act of Parliament to a tax which does not exist. I would suggest that the proper thing to do is to adjourn this Clause until the Corporation Profits Tax has been discussed. We are really putting the cart before the horse. If we are really going to pass the Corporation Profits Tax then we ought to put this Clause in. But I venture to suggest that it would be far better to adjourn this Clause until we have dealt with the Clause dealing with the Corporation Profits Tax.

Mr. BALDWIN: Of course, it is very difficult for me to deal with the course of the Debate in the same way as my right hon. Friend the Chancellor of the Exchequer would have been able to do in answering a point like this. But I can say that if the Corporation Profits Tax Clause be not passed, my right hon. Friend would be placed in a difficulty because, as it is one of the principal Clauses, if it were defeated he would have to reconsider his position.

Colonel WEDGWOOD: I beg to move. "That the Clause be postponed."

The DEPUTY-CHAIRMAN: I think the hon. and gallant Member is too late.

Colonel WEDGWOOD: May I say that I think it is most desirable that we should not pass this Clause now, because no one understands it, and because this Corporation Profits Tax is a matter in great
dispute. I do not know whether the right hon. Gentleman the Financial Secretary to the Treasury is fully aware of the fact, but there is a much stronger feeling against it than there is even against the Excess Profits Duty. To press this Clause at this time when it mentions the Corporation Profits Tax, seems to me to be most improper. I agree with my right hon. Friend (Sir F. Banbury) that we ought to postpone the Clause, and that the proper time to deal with the matter will be on a future Clause. In view of the strong objection to passing the Clause now, I shall oppose it. We cannot move now, I understand, to postpone it, and, therefore, I shall vote in the lobby against it.

Sir F. BANBURY: Is there anything to prevent an hon. Member, in the discussion on the Motion that the Clause stand part of the Bill, moving that the Clause be adjourned? I think we can move to adjourn the discussion on this particular Clause.

The DEPUTY-CHAIRMAN: I do not think that would be possible. I do not think a Motion that the Debate on the Motion that the Clause stand part of the Bill be postponed would be in order, nor would it be usual to move at that stage that the Clause be postponed. The question that the Clause stand part of the Bill has been proposed from the Chair.

Sir D. MACLEAN: I do not gather from what has taken place that the procedure is exactly what has been described or that that is the actual position of the Committee. No doubt the Clause has been called from the Chair and it would not be usual at that point to allow an hon. Member to move to postpone the Clause. From my own knowledge of the duties of the Chair, I quite agree that it is not usual to allow a Motion to postpone a Clause unless there is very good cause shown for it. I would suggest, however, that in this case there have been sound reasons demonstrated why the Clause should be put back. One of these is that Clause 44 deals with the Corporation Profits Tax. The Chancellor of the Exchequer when the matter was mentioned said he was going to bring up the whole of the Excess Profits Duty, Clauses 40 to 43, and postpone them until Monday. This particular Clause is linked up entirely
with these Clauses and without the passing of these Clauses it is quite clear that the passing of this Clause would be no use. I should have thought that these were sound reasons for accepting the Motion to postpone the Clause although it is quite unusual.

The DEPUTY-CHAIRMAN: I think the reasons that have been given by the two right hon. Gentlemen who have spoken ought to have some weight with me. When the question is put from the Chair, "That the Clause stand part of the Bill," it is quite unusual to have a Motion to postpone it. The usual time to move that a Clause be postponed is when the Clause is first called from the Chair. But having heard the reasons put forward by the two right hon. Gentlemen, I think I should be right in accepting the Motion now for the postponing of the Clause.

Colonel WEDGWOOD: I beg to move, "That the Clause be postponed."
The point of Order is settled, and the Deputy-Chairman has accepted my Motion after considering the points which have been raised. I hope that the Motion I make will now have the support of the Treasury Bench.

Lieut.-Commander KENWORTHY: We are in a difficulty now with regard to the Clause as the Financial Secretary to the Treasury has just told us.

The DEPUTY-CHAIRMAN: It is not in order now to discuss the Clause itself.

Lieut. - Commander KENWORTHY: That is just what I was coming to. The Financial Secretary to the Treasury has told us very little about the Clause and apparently there is a great deal more in it than we have understood up to the present. I think, therefore, it ought to be postponed until the Chancellor of the Exchequer is present. I make no reflection upon the right hon. Gentleman who was in his place, but I think that after what he said the question should be postponed until the Chancellor of the Exchequer is here.

Question put, "That the Clause be postponed."

The Committee divided: Ayes, 60; Noes, 194.

Division No. 193.]
AYES.
[5.57 p.m.


Asquith, Rt. Hon. Herbert Henry
Grundy, T. W.
Remnant, Sir James


Astbury, Lieut.-Commander F. W.
Guest, J. (York, W. R., Hemsworth)
Kendall, Athelstan


Barnes, Major H. (Newcastle, E.)
Gwynne, Rupert S.
Richardson, R. (Houghton-le-Spring)


Bell, James (Lancaster, Ormskirk)
Hall, Lieut.-Col. Sir F. (Dulwich)
Roberts, Frederick O. (W. Bromwich)


Benn, Capt. Sir I. H., Bart. (Gr'nw'h)
Hall, F. (York, W. R., Normanton)
Royce, William Stapleton


Bird, Sir A. (Wolverhampton, West)
Hallas, Eldred
Sexton, James


Bottomley, Horatio W.
Hayday, Arthur
Short, Alfred (Wednesbury)


Bowerman, Rt. Hon. Charles W.
Hayward, Major Evan
Sitch, Charles H.


Bowles, Colonel H. F.
Herbert, Hon. A. (Somerset, Yeovil)
Smith, Sir Allan M. (Croydon, South)


Bowyer, Captain G. E. W.
Hinds, John
Spoor, B. G.


Bramsdon, Sir Thomas
Hirst, G. H.
Stanton, Charles B.


Breese, Major Charles E.
Hodge, Rt. Hon. John
Surtees, Brigadier-General H. C.


Briant, Frank
Hotchkin, Captain Stafford Vere
Swan, J. E.


Broad, Thomas Tucker
Irving, Dan
Sykes, Sir Charles (Huddersfield)


Bromfield, William
Jones, Sir Evan (Pembroke)
Taylor, J.


Burn, Col. C. R. (Devon, Torquay)
Jones, Henry Haydn (Merioneth)
Thomas, Brig.-Gen. Sir O. (Anglesey)


Campbell, J. D. G.
Joynson-Hicks, Sir William
Thomson, T. (Middlesbrough, West)


Casey, T. W.
Kelley, Major Fred (Rotherham)
Thorne, G. R. (Wolverhampton, E.)


Clynes, Rt. Hon. J. R.
Kenyon, Barnet
Tootill, Robert


Cooper, Sir Richard Ashmole
Law, Alfred J. (Rochdale)
Waterson, A. E.


Cowan, D. M. (Scottish Universities)
Lawson, John J.
Wedgwood, Colonel J. C.


Curzon, Commander Viscount
Lunn, William
White, Charles F. (Derby, Western)


Davidson, Major-General Sir J. H.
Lyle-Samuel, Alexander
Wignall, James


Davies, A. (Lancaster, Clitheroe)
Maclean, Neil (Glasgow, Govan)
Williams, Aneurin (Durham, Consett)


Davison, J. E. (Smethwick)
Mills, John Edmund
Wilson, Rt. Hon. J. W. (Stourbridge)


Davison, Sir W. H. (Kensington, S.)
Mosley, Oswald
Winterton, Major Earl


Entwistle, Major C. F.
Murray, Dr. D. (Inverness & Ross)
Wood, Major M. M. (Aberdeen, C.)


FitzRoy, Captain Hon. E. A.
Myers, Thomas
Yate, Colonel Charles Edward


Galbraith, Samuel
Newbould, Alfred Ernest.
Young, Sir Frederick W. (Swindon)


Glanville, Harold James
Newman, Sir R. H. S. D. L. (Exeter)
Young, Robert (Lancaster, Newton)


Gould, James C.
O'Grady, Captain James



Graham, W. (Edinburgh, Central)
Palmer, Charles Frederick (Wrekin)
TELLERS FOR THE AYES.—


Griffiths, T. (Monmouth, Pontypool)
Rees, Capt. J. Tudor- (Barnstaple)
Mr. G. Locker-Lampson and Mr. Holmes.


NOES.


Adair, Rear-Admiral Thomas B. S.
Betterton, Henry B.
Chamberlain, N. (Birm., Ladywood)


Agg-Gardner, Sir James Tynte
Bigland, Alfred
Clough, Robert


Ainsworth, Captain Charles
Birchall, Major J. Dearman
Coates, Major Sir Edward F.


Allen, Lieut.-Colonel Willliam James
Blair, Reginald
Coats, Sir Stuart


Archer-Shee, Lieut.-Colonel Martin
Boscawen, Rt. Hon. Sir A. Griffith-
Cockerill, Brigadier-General G. K.


Armitage, Robert
Bridgeman, William Clive
Cohen, Major J. Brunel


Ashley, Colonel Wilfrid W.
Briggs, Harold
Cope, Major Wm.


Bagley, Captain E. Ashton
Brown, Captain D. C.
Courthorpe, Major George L.


Baird, Sir John Lawrence
Buchanan, Lieut.-Colonel A. L. H.
Craig, Colonel Sir J. (Down, Mid)


Baldwin, Rt. Hon. Stanley
Buckley, Lieut.-Colonel A.
Craik, Rt. Hon. Sir Henry


Balfour, George (Hampstead)
Bull, Rt. Hon. Sir William James
Dalziel, Sir D. (Lambeth, Brixton)


Balfour, Sir R. (Glasgow, Partick)
Burdon, Colonel Rowland
Davies, Thomas (Cirencester)


Banbury, Rt. Hon. Sir Frederick G.
Butcher, Sir John George
Dawes, Commander


Banner, Sir John S. Harmood-
Carew, Charles Robert S.
Dennis, J. W. (Birmingham, Deritend)


Barnston, Major Harry
Carr, W. Theodore
Dockrell, Sir Maurice


Barrie, Rt. Hon. H.T.(Lon'derry, M.)
Carson, Rt. Hon. Sir Edward H.
Eyres-Monsell, Commander B. M.


Barton, Sir William (Oldham)
Carter, R. A. D. (Man., Withington)
Falcon, Captain Michael


Beckett, Hon. Gervase
Cautley, Henry S.
Falle, Major Sir Bertram G.


Bell, Lieut.-Col. W. C. H. (Devizes)
Cayzer, Major Herbert Robin
Farquharson, Major A. C.


Bellairs, Commander Carlyon W.
Cecil, Rt. Hon. Evelyn (Birm., Aston)
Fell, Sir Arthur


Benn, Sir A. S. (Plymouth, Drake)
Chamberlain, Rt. Hn. J.A.(Birm.,W.)
Fildes, Henry


Fisher, Rt. Hon. Herbert A. L.
Law, Rt. Hon. A. B. (Glasgow, C.)
Richardson, Sir Albion (Camberwell)


Flannery, Sir James Fortescue
Lewis, Rt. Hon. J. H. (Univ., Wales)
Roberts, Rt. Hon. G. H. (Norwich)


Foreman, Henry
Lewis, T. A. (Glam., Pontypridd)
Roberts, Sir S. (Sheffield, Ecclesall)


Forrest, Walter
Lloyd, George Butler
Robinson, S. (Brecon and Radnor)


Foxcroft, Captain Charles Talbot
Locker-Lampson, Com. O. (H'tingd'n)
Robinson, Sir T. (Lancs., Stretford)


Fraser, Major Sir Keith
Macdonald, Rt. Hon. John Murray
Rodger, A. K.


Fremantle, Lieut.-Colonel Francis E.
Mackinder, Sir H. J. (Camlachie)
Rogers, Sir Hallewell


Gange, E. Stanley
McLaren, Robert (Lanark, Northern)
Roundels, Colonel R. F.


Ganzoni, Captain Francis John C.
M'Micking, Major Gilbert
Royden, Sir Thomas


Gardiner, James
Macnamara, Rt. Hon. Dr. T. J.
Samuel, Rt. Hon. Sir H. (Norwood)


Gardner, Ernest
McNeill, Ronald (Kent, Canterbury)
Sanders, Colonel Sir Robert A.


Gibbs, Colonel George Abraham
Mallalieu, F. W.
Seager, Sir William


Gilbert, James Daniel
Malone, C. L. (Leyton, E.)
Seddon, J. A.


Gilmour, Lieut.-Colonel John
Malone, Major P. B. (Tottenham, S.)
Shaw, William T. (Forfar)


Glyn, Major Ralph
Marriott, John Arthur Ransome
Shortt, Rt. Hon. E. (N'castle-on-T.)


Grant, James A.
Martin, Captain A. E.
Simm, M. T.


Green, Joseph F. (Leicester, W.)
Matthews, David
Smith, Harold (Warrington)


Greer, Harry
Meysey-Thompson, Lieut.-Col. E. C.
Smithers, Sir Alfred W.


Greig, Colonel James William
Middlebrook, Sir William
Sprot, Colonel Sir Alexander


Gretton, Colonel John
Mildmay, Colonel Rt. Hon. F. B.
Stanier, Captain Sir Seville


Guinness, Lieut.-Col. Hon. W. E.
Mitchell, William Lane
Stanley, Major H. G. (Preston)


Hallwood, Augustine
Molson, Major John Elsdale
Steel, Major S. Strang


Hall, Rr-Adml Sir W. (Liv'p'l,W.D'by)
Mond, Rt. Hon. Sir Alfred M.
Stewart, Gershom


Hambro, Captain Angus Valdemar
Moore, Major-General Sir Newton J.
Sturrock, J. Leng


Hanson, Sir Charles Augustin
Moreing, Captain Algernon H.
Sugden, W. H.


Harmsworth, C. B. (Bedford, Luton)
Morrison, Hugh
Sutherland, Sir William


Harris, Sir Henry Percy
Mount, William Arthur
Talbot, G. A. (Hemel Hempstead)


Haslam, Lewis
Murray, C. D. (Edinburgh)
Terrell, George, (Wilts, Chippenham)


Henderson, Major V. L. (Tradeston)
Murray, John (Leeds, West)
Thomas, Sir Robert J. (Wrexham)


Henry, Denis s. (Londonderry, S.)
Murray, Major William (Dumfries)
Thomas-Stanford, Charles


Herbert, Dennis (Hertford, Watford)
Nall, Major Joseph
Thorpe, Captain John Henry


Hills, Major John Waller
Neal, Arthur
Townley, Maximilian G.


Hoare, Lieut.-Colonel Sir S. J. G.
Nicholson, William G. (Petersfield)
Tryon, Major George Clement


Holbrook, Sir Arthur Richard
Oman, Sir Charles William C.
Turton, E. R.


Hood, Joseph
O'Neill, Major Hon. Robert W. H.
Waddington, R.


Hope, Sir H. (Stirling & Cl'ckm'nn'n,W.)
Palmer, Brigadier-General G. L.
Walton, J. (York, W. R., Don Valley)


Hopkins, John W. W.
Parkinson, Albert L. (Blackpool)
Waring, Major Walter


Hopkinson, A. (Lancaster, Mossley)
Parry, Lieut.-Colonel Thomas Henry
Warren, Lieut.-Col. Sir Alfred H.


Howard, Major S. G.
Pease, Rt. Hon. Herbert Pike
Weston, Colonel John W.


Hunter, General Sir A. (Lancaster)
Peel, Col. Hn. S. (Uxbridge, Mddx.)
White, Lieut.-Col. G. D. (Southport)


Hunter-Weston, Lieut.-Gen. Sir A. G.
Pennefather, De Fonblanque
Whitla, Sir William


Hurst, Lieut.-Colonel Gerald B.
Perkins, Walter Frank
Wigan, Brig.-Gen. John Tyson


Illlingworth, Rt. Hon. A. H.
Perring, William George
Williams, Lt.-Com. C. (Tavistock)


Inskip, Thomas Walker H.
Philipps, Sir Owen C. (Chester, City)
Williams, Col. Sir R. (Dorset, W.)


James, Lieut.-Colonel Hon. Cuthbert
Pilditch, Sir Philip
Willoughby, Lieut.-Col. Hon. Claud


Jephcott, A. R.
Pinkham, Lieut.-Colonel Charles
Wilson, Daniel M. (Down, West)


Jellett, William Morgan
Pratt, John William
Wilson, Lt.-Col. Sir M. (Bethnal Gn.)


Jesson, C.
Prescott, Major W. H.
Wilson, Lieut.-Col. M. J. (Richmond)


Jodrell, Neville Paul
Pretyman, Rt. Hon. Ernest G.
Wood, Hon. Edward F. L. (Ripon)


Johnstone, Joseph
Pulley, Charles Thornton
Wood, Major S. Hill- (High Peak)


Jones, J. T. (Carmarthen, Llanelly)
Purchase, H. G.
Yeo, Sir Alfred William


Jones, William Kennedy (Hornsey)
Rae, H. Norman
Young, Lieut.-Com. E. H. (Norwich)


Kidd, James
Randles, Sir John S.
Young, W. (Perth & Kinross, Perth)


Kinloch-Cooke, Sir Clement
Ratcliffe, Henry Butler
Younger, Sir George


Knights, Capt. H. N. (C'berwell, N.)
Raw, Lieutenant-Colonel N.



Lambert, Rt. Hon. George
Rawlinson, John Frederick Peel
TELLERS FOR THE NOES.—


Larmor, Sir Joseph
Remer, J. R.
Lord E. Talbot and Mr. Parker.


Question put, and agreed to.

Division No. 194.]
AYES.
[9.18 p.m.


Armitage, Robert
Hayday, Arthur
Richardson, R. (Houghton-le-Spring)


Banbury, Rt. Hon. Sir Frederick G.
Hayward, Major Evan
Roberts, Frederick O. (W. Bromwich)


Barker, Major Robert H.
Hinds, John
Sexton, James


Barnes, Major H. (Newcastle, E.)
Hirst, G. H.
Shaw, Thomas (Preston)


Bell, James (Lancaster, Ormskirk)
Hogge, James Myles
Short, Alfred (Wednesbury)


Benn, Captain Wedgwood (Leith)
Holmes, J. Stanley
Sitch, Charles H.


Bottomley, Horatio W.
Irving, Dan
Smith, W. R. (Wellingborough)


Bowerman, Rt. Hon. Charles W.
Johnstone, Joseph
Swan, J. E.


Bramsdon, Sir Thomas
Kenworthy, Lieut.-Commander J. M.
Thomas, Brig.-Gen. Sir O. (Anglesey)


Bromfield, William
Kenyon, Barnet
Thomson, T. (Middlesbrough, West)


Cory, Sir C. J. (Cornwall, St. Ives)
Lawson, John J.
Tootill, Robert


Davies, Sir William H. (Bristol, S.)
Lunn, William
Waddington, R.


Davison, J. E. (Smethwick)
Maclean, Neil (Glasgow, Govan)
Waterson, A. E.


Entwistle, Major C. F.
Maclean, Rt. Hon. Sir D. (Midlothian)
Wedgwood, Colonel J. C.


Finney, Samuel
Moore, Major-General Sir Newton J.
White, Charles F. (Derby, Western)


Galbraith, Samuel
Morgan, Major D. Watts
Wignall, James


Gould, James C.
Myers, Thomas
Williams, Aneurin (Durham, Consett)


Grundy, T. W.
Newbould, Alfred Ernest
Young, Robert (Lancaster, Newton)


Guest, J. (York, W. R., Hemsworth)
O'Grady, Captain James



Hall, F. (York, W. R., Normanton)
Palmer, Charles Frederick (Wrekin)
TELLERS FOR THE AYES.—


Hallas, Eldred
Rae, H. Norman
Mr. G. Thorne and Mr. T. Griffiths.


NOES.


Adair, Rear-Admiral Thomas B. S.
Falcon, Captain Michael
M'Lean, Lieut.-Col. Charles W. W.


Addison, Rt. Hon. Dr. C.
Farquharson, Major A. C.
Middlebrook, Sir William


Adkins, Sir W. Ryland D.
Fell, Sir Arthur
Mitchell, William Lane


Ainsworth, Captain Charles
Fildes, Henry
Molson, Major John Elsdale


Allen, Lieut.-Colonel William James
Foreman, Henry
Mond, Rt. Hon. Sir Alfred M.


Astbury, Lieut.-Commander F. W.
Forestier-Walker, L.
Montagu, Rt. Hon. E. S.


Atkey, A. R.
Fraser, Major Sir Keith
Moreing, Captain Algernon H.


Bagley, Captain E. Ashton
Gange, E. Stanley
Murray, John (Leeds, West)


Baird, Sir John Lawrence
Ganzoni, Captain Francis John C.
Murray, Major William (Dumfries)


Baldwin, Rt. Hon. Stanley
Gardiner, James
Nall, Major Joseph


Balfour, George (Hampstead)
Gibbs, Colonel George Abraham
Neal, Arthur


Barnston, Major Harry
Gilmour, Lieut.-Colonel John
Newman, Colonel J. R. P. (Finchley)


Barrand, A. R.
Green, Joseph F. (Leicester, W.)
Norris, Colonel Sir Henry G.


Barrie, Rt. Hon. H. T. (Lon'derry, N.)
Gregory, Holman
Oman, Sir Charles William C.


Barton, Sir William (Oldham)
Greig, Colonel James William
Parkinson, Albert L. (Blackpool)


Bell, Lieut.-Col. W. C. H. (Devizes)
Hallwood, Augustine
Parkinson, John Allen (Wigan)


Bennett, Thomas Jewell
Hall, Lieut.-Col. Sir F. (Dulwich)
Pease, Rt. Hon. Herbert Pike


Betterton, Henry B.
Hall, Rr-Adml Sir W. (Liv'p'l,W.D'by)
Perring, William George


Bigland, Alfred
Hambro, Captain Angus Valdemar
Pinkham, Lieut.-Colonel Charles


Birchall, Major J. Dearman
Hanson, Sir Charles Augustin
Pownall, Lieut.-Colonel Assheton


Blane, T. A.
Harmsworth, C. B. (Bedford, Luton)
Pratt, John William


Boles, Lieut.-Colonel D. F.
Haslam, Lewis
Prescott, Major W. H.


Boscawen, Rt. Hon. Sir A. Griffith-
Henderson, Major V. L. (Tradeston)
Purchase, H. G.


Bowyer, Captain G. E. W.
Henry, Denis S. (Londonderry, S.)
Ramsden, G. T.


Breese, Major Charles E.
Herbert, Hon. A. (Somerset, Yeovil)
Randles, Sir John S.


Bridgeman, William Clive
Herbert, Dennis (Hertford, Watford)
Ratcliffe, Henry Butler


Briggs, Harold
Holbrook, Sir Arthur Richard
Rees, Sir J. D. (Nottingham, East)


Broad, Thomas Tucker
Hood, Joseph
Reid, D. D.


Brown, Captain D. C.
Hope, Sir H.(Stirling & Cl'ckm'nn'n,W.)
Remnant, Sir James


Buckley, Lieut.-Colonel A.
Hope, James F. (Sheffield, Central)
Roberts, Rt. Hon. G. H. (Norwich)


Bull, Rt. Hon. Sir William James
Hopkins, John W. W.
Roberts, Sir S. (Sheffield, Ecclesall)


Burn, Col. C. R. (Devon, Torquay)
Hopkinson, A. (Lancaster, Mossley)
Robinson, S. (Brecon and Radnor)


Campbell, J. D. C.
Hotchkin, Captain Stafford Vere
Robinson, Sir T. (Lancs., Stretford)


Carew, Charles Robert S.
Howard, Major S. G.
Rodger, A. K.


Carr, W. Theodore
Hudson, R. M.
Rogers, Sir Hallowell


Casey, T. W.
Hume-Williams, Sir W. Ellis
Rutherford, Sir W. W. (Edge Hill)


Cayzer, Major Herbert Robin
Illingworth, Rt. Hon. A. H.
Samuel, A. M. (Surrey, Farnham)


Chadwick, Sir Robert
James, Lieut.-Colonel Hon. Cuthbert
Sanders, Colonel Sir Robert A.


Chamberlain, Rt. Hn. J. A. (Birm., W.)
Jephcott, A. R.
Seager, Sir William


Chamberlain, N. (Birm., Ladywood)
Jesson, C.
Seddon, J. A.


Clay, Lieut.-Colonel H. H. Spender
Jodrell, Neville Paul
Shaw, William T. (Forfar)


Clough, Robert
Johnson, Sir Stanley
Short, Alfred (Wednesbury)


Coates, Major Sir Edward F.
Jones, Sir Edgar R. (Merthyr Tydvil)
Simm, M. T.


Cobb, Sir Cyril
Jones, Sir Evan (Pembroke)
Smith, Sir Allan M. (Croydon, South)


Cohen, Major J. Brunel
Jones, Henry Haydn (Merioneth)
Smith, Harold (Warrington)


Cope, Major Wm.
Jones, J. T. (Carmarthen, Llanelly)
Smithers, Sir Alfred W.


Cowan, D. M. (Scottish Universities)
Kelley, Major Fred (Rotherham)
Stanley, Major H. G. (Preston)


Craig, Colonel Sir J. (Down, Mid)
Kelly, Edward J. (Donegal, East)
Stanton, Charles B.


Davidson, Major-General Sir J. H.
Kidd, James
Steel, Major S. Strang


Davies, Thomas Cirencester)
Knights, Capt. H. N. (C'berwell, N.)
Stephenson, Colonel H. K.


Dawes, Commander
Larmor, Sir Joseph
Stewart, Gershom


Doyle, N. Grattan
Law, Alfred J. (Rochdale)
Sturrock, J. Leng


Du Pre, Colonel William Baring
Lloyd, George Butler
Sugden, W. H.


Edge, Captain William
Locker-Lampson, Com. O. (H'tlngd'n)
Sutherland, Sir William


Edwards, Major J. (Aberavon)
Lorden, John William
Sykes, Sir Charles (Huddersfield)


Elliot, Capt. Walter E. (Lanark)
M'Curdy, Charles Albert
Taylor, J.


Elveden, Viscount
Mackinder, Sir H. J. (Camlachie)
Thomson, F. C. (Aberdeen, South)


Eyres-Monsell, Commander B. M.
McLaren, Robert (Lanark, Northern)
Townley, Maximilian G.


Wallace, J.
Williams, Lt.-Com. C. (Tavistock)
Winterton, Major Earl


Walton, J. (York, W. R., Don Valley)
Williams, Lt.-Col. Sir R. (Banbury)
Wood, Sir J. (Stalybridge and Hyde)


Ward, Col. L. (Kingston-upon-Hull)
Williamson, Rt. Hon. Sir Archibald
Woolcock, William James U.


Waring, Major Walter
Wills, Lieut.-Colonel Sir Gilbert
Young, Lieut.-Com. E. H. (Norwich)


Warren, Lieut.-Col. Sir Alfred H.
Wilson, Daniel M. (Down W.)
Young, Sir Frederick W. (Swindon)


Wheler, Lieut.-Colonel C. H.
Wilson, Colonel Leslie O. (Reading)



Whitla, Sir William
Wilson, Lt.-Col. Sir M. (Bethnal Gn.)
TELLERS FOR THE NOES.—


Willey, Lieut.-Colonel F. V.
Wilson-Fox, Henry
Lord E. Talbot and Mr. Parker.


Question put, and agreed to.

Clause ordered to stand part of the Bill.

Clauses 29 (Consequential and Minor Amendments to 8 and 9, Geo. 5, c. 40) and 30 (Interpretation) ordered to stand part of the Bill.

CLAUSE 18.—(Deduction in respect of relatives taking charge of widower's or widow's children.)

(1) If the claimant proves that he is a widower and that for the year of assessment
a person being a female relative of his or of his deceased wife is resident with him for the purpose of having the charge and care of any child of his, he shall, subject as hereinafter provided, be entitled to a deduction of forty-five pounds in respect of that female relative:
Provided that—

(a) no deduction shall be allowed under this Section unless the claimant proves that no other individual is entitled to a deduction in respect of the female relative under the provisions of this Part of this Act or, if any other individual is so entitled, that the other individual has relinquished his claim thereto; and
(b) no deduction shall be allowed under this Section where the female relative is a married woman living with her husband, and the husband has claimed and been allowed a deduction of two hundred and twenty-five pounds under the preceding provisions of this Part of this Act.

(2) In this Section the expression "child" means a child in respect of whom a deduction is allowed under this Part of this Act.

(3) This Section shall apply to a claimant being a widow as it applies to a claimant being a widower, with the substitution of "her deceased husband" for "his deceased wife".

The CHAIRMAN: The first Amendment to this Clause in the name of the hon. and gallant Member (Colonel Wedgwood) (in Sub-section (1), after the word "a" ["he is a widower"], insert the words "widow or") is not necessary. It is dealt with under Sub-section (3).

Mr. W. GRAHAM: I beg to move, in Sub-section (1), to leave out the word "widower" ["he is a widower"], and to insert instead thereof the words "householder with no wife living with him"
The Clause provides that where a claimant is a widower and has someone resident with him, a female relative of his or of his deceased wife, for the purpose of looking after his children, he shall be entitled to an allowance of £45 per annum. My suggestion is that there is at least a fair number of cases where a man may not be in the strict position of a widower, but may require this protection just as urgently as any widower. Such a case would occur where a man, having married, has separated from his wife and is maintaining his wife elsewhere, or who, perhaps, has been deserted by his wife. It may be argued that a man would be entitled to the concessions which are
afforded to married men under the ordinary structure of the Income Tax law, but we have seen earlier in the Debate this afternoon that there is considerable doubt, not only on the point of interpretation of the law in that matter, but more particularly on the point of departmental practice.

Mr. CHAMBERLAIN: I am sure that these words go much further than the Mover of the Amendment wishes them to go. I have not been able to find any restrictive words which would deal with the cases he has in mind. He thinks of a man who has a wife living, and that wife has deserted him. But suppose he is a man who has driven his wife out of the house, and that the woman he employs as his housekeeper, and for whom he demands the allowance, is the cause of the scandal. I do not see how we can guard against that. I shall be glad to consider any further suggestion from the hon. Gentleman of a more restrictive kind and which will not perhaps be open to such grave objections as those I have mentioned.

Sir H. NIELD: I have given notice of an Amendment later on in the Clause, which I think would probably go a long way to meet the case, as it would restrict the concession to a man who was left a widower with children, and it would effect, I think, a good deal of the purpose of the Mover of the Amendment. It deals with the case of a man who has no female relations or a relation of his deceased wife who could come in and take charge of the children. There is the case which arises where upon the death of the wife allegations are made against the husband of neglect which makes it impossible for the wife's relatives to come in and look after the children. The man may have no female relative and he gets the assistance of some person to perform the functions of house-keeper.

Lieut.-Commander KENWORTHY: We do not want to subsidise a case of the sort to which the right hon. Gentleman referred, where the man might have taken up with another woman, but can the right hon. Gentleman not give us some sort of hope about this Amendment? I think the hon. Member for Central Edinburgh (Mr. W. Graham) wishes to help a case where a man, through no fault of his own has made a bad match, and is legally separated from his wife, who max
be a drunkard or a lunatic. I take it that the relief is not so much sought for the man as for the children, and we want to encourage the man to look after the children. Would it not be possible to substitute the particular case of the man who has a judicial separation? There are many cases of separation, particularly amongst the poorer classes, and in many of which it is not the man's fault, and in which it is most desirable that the children should be well looked after.

Mr. CHAMBERLAIN: I do not think I can go any further now than the offer I made to the hon. Gentleman for Central Edinburgh (Mr. W. Graham), that if he submits some more restrictive form of words I shall be glad to consider them.

Lieut.-Commander KENWORTHY: On Report?

Mr. CHAMBERLAIN: If there is time between now and Report, I will do my best. There is another condition I want to make. I do not want to give two allowances to a man, one in respect of a wife and another in respect of a woman discharging the wife's household duties. I shall be glad to favourably consider a more restrictive form of words from the hon. Member.

Mr. W. GRAHAM: On that understanding, which I have no hesitation in accepting, I ask leave to withdraw.

Amendment, by leave, withdrawn.

Sir F. HALL: I beg to move, in Subsection (1), to leave out the words, "being a female relative of his or his deceased wife."
In the case of a widower who has no relative whom he can get to look after his children, surely he should get the benefit if he has to appoint some house-keeper who is not a relative. I cannot see why the Bill has been drawn as it is. The man has lost his wife, and if he has got young children it is very necessary in the interests of the country that they should be well brought up. He has got the expense of appointing somebody to look after them. Under those circumstances I cannot conceive why there should be a difference in the amount of allowance simply and solely because the man appoints someone who is not a relative. I have had a great many letters with regard to this matter pointing out
the hardships which will be suffered if the Clause is left as it is.

Mr. CHAMBERLAIN: The case which my hon. Friend has put before the House is a familiar one and has been before the House on many previous occasions. He puts it as the case of a man, a widower with children, who has no female relative. A man might have a sister or any other female relative, but if he chose not to take any of them but to get in some other woman, then under my hon. Friend's proposal he would equally get the allowance. The objection is really of the same character as the objection I made to the Amendment which has just been discussed. When this proposal was made when the Leader of the House was Chancellor of the Exchequer he pointed out that if he accepted the proposal it might be that very undesirable things would occur. He asked the House not to accept an Amendment of this character and the House supported him. Since that discussion the matter came before the Royal Commission, and I quote from their Report:
The following suggestions have been made in connection with the wife allowance and allowance for husband. (3) The allowance in respect of a housekeeper shall be extended to the case of a housekeeper who is not a relative of the taxpayer or his deceased wife.
On that suggestion the Royal Commission report:
With regard to this suggestion the reasons that prompted the original limitation of the housekeeper allowance to persons who were relatives of the taxpayer either by birth or marriage, and reasons which were examined in the House of Commons when the allowance was first made in 1918, still hold good, and are sufficient to warrant us in not recommending any change in that system.
It is not possible to provide for every conceivable case of hardship, but striking a balance between good and evil, I think we should not encourage an undesirable state of things which would be encouraged, not intentionally, but in fact by the proposal of my hon. Friend.

Mr. G. THORNE: I have an Amendment on the Paper to the same effect. On the previous Amendment the right hon. Gentleman expressed his desire to meet the hon. Member (Mr. Graham) in some way if that were possible. I would suggest that he should also consider whether he could not meet this point in
some way and that we should be in a position to submit the case to him.

Mr. CHAMBERLAIN: I will gladly consider any proposal which the hon. Gentleman can put forward and which will guard against the evil I have stated, but I do not think my hon. Friend the Member for Central Edinburgh will find it easy to frame such a proposal in the case he put forward, and I am quite certain that my hon. Friend (Mr. Thorne) when he gets to work on it will find it more difficult in the case now before the House. If the grounds on which I resist it are cut from under my feet, I shall be very glad to meet the hon. Member on the point.

Lieut.-Colonel GUINNESS: I regret the decision of the Chancellor. I think he attaches altogether too much weight to the effect of this provision in inculcating an undesirable state of public morals. I think he over-estimates the danger and evil which would result from accepting this Amendment. After all, the concession is not limited to those widowers who have their own relations living. It is also extended to those who have their wife's relations, and surely the occurrences to which the right hon. Gentleman has referred are just as likely to take place with the wife's relations as with complete strangers in blood. I therefore think he has set before us rather a false distinction. After all, these wife's relations, even the deceased wife's sisters, are now marriageable and presumably also just as liable to the objections which the right hon. Gentleman has advanced as any other female looking after the children. Surely it is specially hard on those widowers who are left without female relatives that they should not have this concession, because they are the very people who will be put to the heaviest expense. Those who have got female relations will probably not have to pay them for looking after the children, because natural affection will come in in many cases and induce the female relatives to take over the charge of the children without payment. There is undoubtedly a great sense of grievance owing to this limitation, and I still hope this matter will be pressed by those who have had the difficulty brought to their notice.

Sir H. NIELD: I yield to no man in this Committee in my desire to put down any illicit intercourse between the sexes,
but I say that there are words capable of being introduced into this Clause for protection in the hard case of the widower who can get no remedy from the Government. Is it likely that, for the sake of a dole of £40 or £45 a year, a man would injure his own character, assuming him to have been a right living man up to that time? It seems to me that if my right hon. Friend is going to make any concession to the hon. Member for East Edinburgh (Mr. W. Graham), who is boldly taking up the line that those under separation orders shall be included, then surely he can deal with the smaller and more restricted case of the widower without female relatives. I am quite willing to suggest that words might be introduced which shall require a man to satisfy the authorities that he cannot get a remedy.

Mr. CHAMBERLAIN: Will my hon. Friend frame words of that kind and put them down for consideration on Report?

Sir H. NIELD: I will do so, certainly.

Dr. MURRAY: The effect of the Chancellor's attitude on this question is undoubtedly to penalise many men, and I believe the possible contingencies mentioned by him would be the exception, and therefore the majority of people who would be so circumstanced would be penalised because occasionally undesirable things occur. I do not think that is a fair principle of legislation for this Committee to adopt, and it looks as if the right hon. Gentleman is penalising a deserving section of the population because of the possibility of a black sheep occurring among them now and then.

Sir S. ROBERTS: Might I suggest to the hon. and gallant Member (Sir F. Hall) that the Amendment should be withdrawn, because otherwise he cannot expect to get the consideration which the right hon. Gentleman has said he will give to the previous Amendment. I sympathise entirely with the Amendment. I had a case sent to me a short time ago where a widower had no female relative, and I am certain it was a genuine case which ought to be met. I therefore hope the Amendment will be withdrawn.

Mr. W. GRAHAM: I intervene to make a proposal which might meet the difficulty. The two Amendments which we have been discussing cover really one
point, and I want on that head to say that it is quite true that the Royal Commission recommended that no change should be made, but that was mainly on the ground that the matter had been recently investigated, and they did not feel called upon, nor, indeed, had they time, to make fresh and prolonged inquiries. In the same Report, however, we made a number of suggestions with reference to allowances for expenses. I am willing to admit now that it will be a very difficult task for me to frame better words than those which are on the Order Paper. They appear there after anxious consideration, as the best words we could produce, and I do not think we on these Benches can improve very much on them, but I want to suggest to the right hon. Gentleman that it might be possible to meet this case by an allowance for expenses which fall upon a worker in the execution of his duty. There are difficulties under that head, and I am no friend of departmental rules, but I think it should be possible to include in the Bill something by way of working expenses, and to add some departmental rule which would safeguard the abuse that is contained in a wide and loose Amendment on this point.

Sir J. BUTCHER: The case which many of us have in mind on this Amendment is a case of real hardship, that of a man whose wife dies, leaving young children, and the man has to go out to work and finds it therefore an absolute necessity that he should have a housekeeper to look after the children and keep his home together. My right hon. Friend proposes to make provision solely in the case where a man has a female relative to look after the children, but there are many cases where a man has no female relative, and is there any reason why he should be deprived of the allowance which is made in the case of the man who has a female relative? I gather that the Chancellor is willing to consider on Report an Amendment which shall meet that case. I do not think it is necessary to argue the moral question, which has been already answered by several hon. Members. If there is a moral question involved, it is just as much involved in the case of the female relative of the wife as in the case of the person who is not a female relative. I put that aside as a totally irrelevant consideration, and I hope the Chancellor
will give us an assurance that before the Report Stage he will introduce words to meet this undoubtedly hard case.

Sir F. HALL: On the understanding that my right hon. Friend will introduce words to meet the case in question, I will ask leave to withdraw the Amendment.

Mr. CHAMBERLAIN: The hon. Member must not carry my pledge further than the spoken words in the Committee, but I am ready to consider the case. I have great sympathy with the objects which the hon. Member wishes to achieve. I admit that it is arguable whether you should refuse the allowance for fear that in certain cases it might encourage practices which we do not want to encourage. Hitherto, the House has not taken that view, and I do not know what opposition might develop if I accepted it now, but, at any rate, the proposal which I make to my hon. Friend is that we should try, as in the case of the previous Amendment, whether we can find protecting words that would enable us to meet the hard case my hon. Friend has in view while eliminating the dangers I have mentioned.

Sir F. HALL: I am sure my right hon. Friend will realise that I did not in any way wish to put his pledge higher than he intended. Under the circumstances, and with the statement made by my right hon. Friend, I wish to withdraw my Amendment.

Amendment, by leave, withdrawn.

Sir J. REMNANT: I beg to move, in Sub-section (1), to leave out the words "child of his" and to insert instead thereof the word "dependent."
If this Amendment be accepted, it will remove the chance of an undoubted hardship. Unfortunately, at the present moment there are, in consequence of the War, many children of soldiers who have fallen during the War, and who would be included if my Amendment were agreed to, but who would otherwise be left out. It cannot be a very large additional charge on the country, and I hope the right hon. Gentleman will agree to it.

Mr. CHAMBERLAIN: The Clause provides for the case of a widower who has resident with him a female relative for the purpose of looking after his children, or of a widow in like case, and my hon. Friend's proposal is that this deduction
should be granted where a female relative is looking after any dependant and not merely a child. The Clause follows specifically the recommendations of the Royal Commission.
7.0 P.M.
All these Clauses are, as I said, in substance a concession. I might have continued the existing practice, and accepted from hon. Members the proposals which the Commission has recommended, but, instead of waiting for them to press these concessions, I have put them in the Bill. My reward is that each one is regarded as a jumping-off place for further demands. I do beg my hon. Friend not to press this. I admit there is no exact logical line to be drawn between that which is in the Bill and that which is out. But, having regard to the amount of deductions, amounting to £18,000,000, which we are allowing in a time of great financial stress, I would beg my hon. Friend not to press me to go further than I have gone.

Sir J. REMNANT: Has the right hon. Gentleman considered that particular point of the children of soldiers or sailors who have fallen during the War?

Mr. CHAMBERLAIN: That is included in my hon. Friend's Amendment.

Mr. MARRIOTT: I have listened to the appeal which has been addressed to the Committee by the Chancellor of the Exchequer. I cannot help feeling that these Amendments, moved one after the other, place not only the Chancellor of the Exchequer, but every Member of the Committee in a very great difficulty. There is not one of these Amendments with which one does not profoundly sympathise, and with which one would not be disposed to agree and to vote for, but, after all, the Chancellor of the Exchequer has explained his proceedings. He has taken the recommendations of the Royal Commission on Income Tax, and he has, at an expense of £18,000,000, inserted those recommendations in the Bill. I submit that is a straightforward course for the Chancellor of the Exchequer to have taken, and, in my humble judgment, it entitles him to the support of the Members of the Committee. I personally should have liked to vote in favour of this Amendment, as I should have liked to vote in favour of every Amendment which has been moved in a
similar direction, but I am not going to do so. I think the appeal which the Chancellor of the Exchequer has made is a very substantial appeal, which ought to go home to the mind of every Member of this Committee. We all know we are bombarded by letters from our constituents. We all know it is very much easier to vote for these Amendments than oppose them. But, after the appeal which has been made by the Chancellor of the Exchequer, I, at any rate, feel I have no course but to support him.

Sir J. REMNANT: Like every other hon. Member, I am not deaf to appeals in the spirit in which the Chancellor of the Exchequer has just made his appeal. I confess one is under a great difficulty. I would not have moved this Amendment unless it had been a fact that a very considerable number of people in this country feel very strongly on the subject. It is very difficult to move Amendments when you know very well those to whom you are making appeals feel as keenly and strongly as one does oneself. I do not want to be unreasonable at all. I rely upon the Chancellor of the Exchequer, as we all do, to stretch a point, as far as he possibly can, but one does not wish to stretch his financial strength to the breaking point by unreasonable Amendments. Under the circumstances, I will ask to be allowed to withdraw the Amendment.

Amendment, by leave, withdrawn.

Lieut.-Colonel GUINNESS: had an Amendment on the Paper in Sub-section (1) after the word "his" ["any child of his"] to insert the words "and having in fact such charge or care."

The CHAIRMAN: This Amendment, I think, is unnecessary, as it does not appear to add anything.

Lieut.-Colonel GUINNESS: It may be advisable to prevent the abuse of the deduction, and to prevent it being used, not for the benefit of children, but for an immoral relationship. I do not press the Amendment, but, in view of the possibility to which the right hon. Gentleman has referred, and the possibility of a deceased wife's relations being subject to this danger, it might be, perhaps, worth inserting it.

Mr. CHAMBERLAIN: I do not think the Amendment adds anything to the
effect of the Bill as it stands. I do not know that there is any objection to that, except the objection which there always is to surplusage.

Captain COOTE: had an Amendment on the Paper, in Sub-section (1) after the word "shall," ["he shall, subject as hereinafter provided"] to leave out the words to the end of the Clause, and to insert instead thereof the words "for the purpose of abatement be treated as a married person."

The CHAIRMAN: This Amendment, I think, is separate from this Clause.

Mr. WATERSON: I beg to move in Sub-section (1) to leave out the word "forty-five" ["forty-five pounds"] and to insert thereof the word "seventy-five."
It is obvious to all Members of the Committee that the cost of living and various other things has risen to such an extent that the working classes whose children this will greatly affect, though, in fact, the parents of all children feel a hardship now, that, under the extreme circumstances in which we are living, this Amendment should be made. I hope, at any rate, the Chancellor of the Exchequer will favourably consider this, and make some concession on these lines.

Captain ELLIOT: The Amendment standing in the name of the hon. and gallant Member for the Isle of Ely (Captain Coote) was intended to raise this very point, namely, that the amount of deduction should be the same under this Clause as is awarded in the case of a wife, on the general ground that, as it is a relief for the general expenses for the good of the children, which is the good of the country, the burden would be no less in this case than in the case of a wife. I have much pleasure in supporting the Amendment.

Mr. CHAMBERLAIN: I am afraid I cannot accept this Amendment. The grounds which have been put forward could be put forward for the extension of every allowance under the Bill. I think there is a clear distinction between the widower who employs a housekeeper and a married couple, for if she has an income of her own it would not be aggregated; whereas, in the case of a married couple, they are taxed on the aggregate
income. I think that is a good reason for the distinction.

Amendment negatived.

Mr. G. LOCKER-LAMPSON: I beg to move in Sub-section (1, a) to leave out the words "unless the claimant proves," and to insert instead thereof the words. "if it is proved."
In order to get the £45 the applicant has to prove that nobody else is getting the benefit of this £45. I do not see how he is ever going to prove that. In order to get the allowance the claimant has to prove that no other individual is entitled to a deduction in respect of the same female relative. How on earth is he going to prove that? I do not understand this provision. Surely we ought to throw the onus the other way, and say, "If it is proved" that somebody else is getting a like deduction.

Mr. CHAMBERLAIN: A man gets a female relative to take charge of his children. He is the person most likely to know whether anybody else is accustomed to receive an allowance in respect of that female relative. To ask the Inland Revenue authorities to prove to the contrary is to ask an impossibility. If the Inland Revenue authorities have reason to believe that somebody else is getting a deduction in respect of the female relative, they have to put the claimant to the proof.

Mr. LOCKER-LAMPSON: One does not like to see put in an Act of Parliament a provision which will never be carried out. I beg to withdraw the Amendment.

Amendment, by leave, withdrawn.

The CHAIRMAN: All the Amendments following on this Clause have been discussed on previous Amendments, until we come to the last one, in the name of the hon. Member for North-East Derbyshire (Mr. Holmes).

Clause 19 (Deduction in Respect of Widowed Mother, etc.) ordered to stand part of the Bill.

CLAUSE 20.—(Deduction in Respect of Children.)

(1) If the claimant proves that he has living at the commencement of the year of assessment any child who is either under the age of sixteen years or who, if over the age of sixteen years at the commence-
nient of that year, is receiving full-time instruction at any university, college, school, or other educational establishment, he shall, subject to the provisions of this Section, be entitled in respect of one child to a deduction of thirty-six pounds, and in respect of each subsequent child to a deduction of twenty-seven pounds.

The expression "child" in this provision includes a step-child and an illegitimate child whose parents have married each other after his birth.

(2) If the claimant proves that for the year of assessment he has the custody of and maintains at his own expense any child who is under the age of sixteen years at the commencement of that year, or who, if over the age of sixteen years at the commencement of that year, is receiving such full-time instruction as aforesaid, and that neither he nor any other individual is entitled to a deduction in respect of the same child under the foregoing provisions of this Section or under any of the other provisions of this Part of this Act, or, if any other individual is entitled to such a deduction, that that other individual has relinquished his claim thereto, he shall be entitled in respect of the child to the same deduction as if the child were a child of his.

(3) No deduction shall be allowed under this Section in respect of any child who is entitled in his own right to an income exceeding forty pounds a year:

Provided that in calculating the income of the child for the purposes of the foregoing provision no account shall be taken of any income to which the child is entitled as the holder of a scholarship, bursary, or other similar educational endowment.

(4) If any question arises as to whether any person is entitled to an allowance under this Section in respect of a child who is over the age of sixteen years, as being a child who is receiving such full-time instruction as aforesaid, the Commissioners of Inland Revenue may, on the request of the Income Tax Commissioners concerned, consult the Board of Education.

In the application of this Sub-section to Scotland and Ireland the Scottish Education Department and the Lord Lieutenant of Ireland shall respectively be substituted for the Board of Education.

The CHAIRMAN: On the question dealt with by this Clause there are two or three Amendments, worded somewhat differently. I think the best one is that of the hon. Member for Pontypool.

Mr. T. GRIFFITHS: I beg to move, in Sub-section (1), after the word "establishment" ["or other educational establishment"], to insert the words "or is wholly or mainly maintained by him while learning a trade, profession, or occupation."
We want an extension of the present privilege in the way the Amendment suggests. We have brought it forward more on the ground of those who need the help because they are more or less friendless. You have the widows of deceased soldiers who are trying to educate their children; trying to put their boys to the best trade or profession they possibly can. It is a very great hardship on these widows who are paying Income Tax if this relief is not granted. You have a section of working men in the same position, those who are trying to give their children the best trade or profession. They often have very big families and great burdens. I do not believe this will mean very much to the Chancellor. We should like him to accept this Amendment, and at the same time give to those for whom we are pleading a similar concession in the matter of education to that he was kind enough to give last year.

Mr. CHAMBERLAIN: I do not know whether the hon. Gentleman who has just spoken heard my statement a while ago, that any concession made one year becomes the argument for demanding more the next. Up till last year no allowance for Income Tax purposes was made in respect to any child over 16. Last year, in deference to a widespread sentiment in the House—and I think representations which came especially from the Benches opposite, though joined in by others—I made a concession in the Bill on behalf of the children pursuing their general education. So long as they were pursuing their general education the concession applied. We resolved, in case of doubt as to the efficiency and character of the education, that the question must be decided in consultation with the Board of Education, and the Inland Revenue Authorities were given the right to apply to the Board of Education to help them to decide the matter. The whole object was general education. It was not apprenticeship. The latter is entirely apart. I really cannot agree to extend the concession which was made to encourage general education to those who are undergoing apprenticeship. If I were, I do not know how the hon. Member or myself would define apprenticeship for the purpose of the Amendment.
Let me remind my hon. Friend in regard to present circumstances that the Ministry of Labour actually has a scheme
in operation under which a State grant is made to employers in order that the wages payable by them to apprentices may be guaranteed if the latter are of age and responsible. Accordingly, under this Amendment, we should be subsidising to the extent of their full wages, and then giving them an allowance because they were still nominally apprentices. It is not a possible proposition. I think this is the particular sort of case the hon. Member had in his mind. So far as I am concerned, I feel bound to adhere to the recommendations with which the proposal was originally pressed, and to which I acceded last year—that this concession should be made in respect to those who, after the age when they might be earning wages, continued bonâ fide their general education.

Mr. HOGGE: I have an Amendment on the Paper which, I think, for the purposes of this discussion rather differs from the one which has been chosen; because I agree to what the Chancellor has said that this Amendment does not define what is an apprenticeship. It is urged that a concession should be made to the parents who are wholly or mainly maintaining their children while learning a trade, profession, or occupation. The words I specifically use in my Amendment are, "or is apprenticed to any trade or profession." The Chancellor says, when he made up his mind that this concession should be made, it was intended to go to the education of the children who were continuing their general education. The words of the Clause, amongst other things, say, "Is receiving full-time instruction at any university, college, etc." As a mater of fact, the Chancellor knows that while they are doing that, say, at the university they may be qualifying for a profession. Take the teaching profession. The old apprenticeship system for teachers is largely done away with, and the whole course is taken while the young man or woman is working for a university degree. That is continuous education. Is it not rather hard lines that if aid is being given in one case, that in another where the parent is apprenticing his boy to such an expensive occupation as accountancy, where a necessary premium obtains, that aid should not be given? I know many parents in Scotland who
borrow the money to pay a considerable premium in order to give their boy his chance. That is the same kind of thing as continuous education. At the university he is qualifying for a profession. I would like my right hon. Friend—while I sympathise with him that, to a certain extent, this goes too far—to make his concession within limits. Obviously, it depends altogether what channel the child takes; whether it comes under the definition of continuing his general education.
Take another case—that of the technical colleges. I know more about my own town than others. Take the Watt Technical College, Edinburgh, where a lad, in continuous education, may complete his studies, and come out qualified as a workman. The parent of another child might not be able to do that, but has to maintain his boy in ordinary apprenticeship. I hope my right hon. Friend grips the point. I do not press him to the extent of the Amendment, but I think there is a case to be made out for, a real bonâ fide apprenticeship. I see another Amendment on the Paper by the hon. Member for Wood Green dealing with the question of articled occupations, which, again, is very expensive, and which parents have to provide for in advance. I should like the Chancellor, before he gives a decision on the point, to take this matter into careful consideration.

Lieut. - Commander KENWORTHY: There is a very large class which would be affected by this Amendment if carried, and which are not covered by the example given by the right hon. Gentleman, of the returned young soldier who has come back and got a grant from the Ministry of Labour. There are these two classes in particular to whom this Amendment would apply. These are children over 16 years of age. The Chancellor knows that during the War the whole education scheme of the country was upset. A great many young girls were unable to continue their education because of the drain on the manpower of the country. Now these girls are being drawn in in very many cases into occupations and trades. I am not referring to the Amendment which narrows this matter down to apprenticeship. The better Amendment is that standing in the name of the hon. Member
for Wood Green. There is one class which, it seems to me, it is extremely desirable should get some relief. After all, there is a tremendous surplus of girls in the world at the present moment. I refer to the younger generation of those under 21, the female children say, the class that is going to be servants. If parents could be encouraged to put this class of young children into some trade or profession at the present time the better it would be for the country. They are entirely left out. The other class is the male children who were not old enough to go into the Army, or who were unfit for it, and who went into what proved to be "blind alley" occupations, munitions, and so forth. These would have been apprenticed, and would have been learning some profession or trade. They are entirely cut out. They cannot go to the Ministry of Labour for help. I therefore say that, although our returned soldiers are a most deserving class, they are provided for. There then remains the two great classes I have mentioned. As to going a good deal too far in these various proposals, I am extremely sorry the Chancellor of the Exchequer has not seen his way, at any rate, to propose some compromise in this matter.

Mr. JOHNSTONE: I remember last year when this matter was discussed the arguments used were these: that if a parent desired to continue the education of his children over the age of 16 we should give him every inducement to do so. But if this Amendment, proposed by the hon. Member opposite, is agreed to, it will mean that the parent, after his child reaches the age of 16, who does not make any sacrifice for the sake of his education in school or college, but put him to a trade where he will earn wages, will thereby have the benefit of this Amendment. What we desired last year was that, in view of the fact that the parents made a sacrifice to continue the education of their children after the age of 16, they should have this relief. We have no intention—it never entered into our discussion—that putting children into apprenticeships in trades or professions would entitle them to receive the benefits the Chancellor is giving in this Clause. If we agree to this Amendment we are going far beyond what was suggested last year. It will lead to enormous extension.

Mr. HOLMES: I am not quite clear as to what the Amendment means. The Chancellor referred to the fact that the Ministry of Labour were supplementing the wages of apprentices in order to give them the amount of money appropriate to their age and responsibilities. He said that if this Amendment were accepted the State would have to give it to others. Surely in the case of an apprentice receiving a grant from the Ministry of Labour the Amendment would not apply, because the words are, "wholly or mainly maintained by him." If the apprentice was receiving money as wages he could not be wholly or mainly maintained by his parents. The profession of chartered accountants, to which I belong, is one in which it is very difficult to get into, because there are not a great many of them. Under the Royal Charter each accountant is only allowed to take two articled clerks, and five years are occupied in the apprenticeship, and no-one comes in without paying a premium. Some firms pay a small salary and some none at all, during the five years, and the salary paid is generally the amount of the premium. There are a large number of men with small incomes who are endeavouring to article their sons to these professions, and who have to bear for five years the whole expense of maintaining them. It is to the national advantage that this should be encouraged, and this Amendment asks that an allowance should be made in such cases. I hope the Chancellor of the Exchequer will reconsider his decision.

Sir P. MAGNUS: I think the whole object of this Clause will be frustrated if any one of these Amendments is adopted. It seems to me that these words have one object only, and that is to encourage children to be educated over the age of 16 at one of these institutions. In none of the cases mentioned would the object of this Clause be carried out, because they would not be receiving the general education which is specified. The case has been mentioned of a student, instead of going to the Watt Technical College in Edinburgh, being apprenticed to a trade, and the question has been asked if the cases are not similar. That would be difficult, because when a boy is apprenticed his education is not conducted in the same way as is the case at a college. It. fell to my lot to draw up the scheme of Manchester for the Watt College, and
I know that the education given is very different from the training of a boy as an apprentice. I think, if we adopt any of the Amendments which are suggested, we should frustrate the object of this Clause.

Mr. GRIFFITHS: These boys do not receive any wages or salary. Take the case which has been mentioned of boys who desire to become accountants. They have to sit for examinations just the same as those who attend the colleges, and there are some parents who make very great sacrifices to educate their children, although they are apprentices. This is a case where you are dealing with people with very small incomes, and we have to assist such families, not only to learn professions, but to get their education at the same time. They will have to purchase books in order to continue the education of these boys, although they are apprenticed to trades or attached to some of the professions. I appeal to the Chancellor of the Exchequer to accept this proposal, because it will not be a big loss. If he does not, of course, we have nothing to do but depend upon his generosity. I admit the right hon. Gentleman has been very generous in regard to some of the Amendments put forward, but, as he says he is not able to accept this proposal, I ask leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

Colonel NEWMAN: I beg to move in Sub-section (1) to leave out the word "thirty-six" and to insert instead thereof the word "forty." I cannot understand why the word "thirty-six" has been put in the Bill at all.

Mr. CHAMBERLAIN: May I point out that "thirty-six" in the present Finance Bill is equivalent to "forty" in the last Bill, and this follows the line of the other alteration made in accordance with the recommendations of the Royal Commission?

Colonel NEWMAN: Does the same apply to "twenty-seven"?

Mr. CHAMBERLAIN: Yes; they are adjusted under the new scheme.

Colonel NEWMAN: With that assurance, I ask leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

Motion made, and Question proposed, "That the Clause stand part of the Bill."

Colonel NEWMAN: I desire to make one point. I understand that in making this adjustment 36 is equivalent to 40 and 27 is equivalent to 30. I take it that these adjustments have been made right through the Bill. It may be easy for Members of this Committee to understand this, but it is not so in regard to the people who have to fill up the Returns for the Income Tax officials, for it will make their work much more onerous and costly to the taxpayer. There will be official after official revising and refilling figures and taking out other figures in order to insert these. I have been told by an official of the great difficulties caused by constantly changing these figures. Sometimes an official if he does his duty often has to take with him an enormous mass of books. This official to whom I allude told me that to deal with a simple case he had sometimes to take a whole cab-load of official forms, and he asked me to warn the Committee that they ought to make these forms as simple as possible, and change the figures as little as possible. I do not think that is being done by changing 30 to 27 and 40 to 36.

CLAUSE 21.—(Deduction in respect of dependent relatives.)

(1) If the claimant proves that he maintains at his own expense any person, being a relative of his or of his wife who is incapacitated by old age or infirmity from maintaining himself, or his or his wife's widowed mother, and being a person whose total income from all sources does not exceed twenty-five pounds a year, he shall be entitled to a deduction of twenty-five pounds in respect of each person whom he so maintains.
(2) Where two or more persons jointly maintain any such person as aforesaid the deduction to be made under this Section shall be apportioned between them in proportion to the amount or value of their respective contributions towards the maintenance of that person.
(3) This Section shall apply to a claimant being a female person as it applies to a claimant being a male person with the substitution of "husband" for "wife."

Sir R. NEWMAN: I beg to move, in in Sub-section (1), to leave out the word "widowed" ["wife's widowed mother"].
I hope the Chancellor of the Exchequer will be able to accept this proposal. I understand that a man who has an aged mother, or his wife's mother,
can obtain certain relief, but if the mother or mother-in-law happens to be a widow he cannot get this deduction. There are many cases I could mention of the same character and my proposal would not make any difference to the principle of the Budget, and it would meet cases which at present are inflicting a very great hardship.

Mr. CHAMBERLAIN: The Royal Commission after considering this question recommended an extension in one respect, that the law should be that where a taxpayer maintains his widowed mother, the allowance should be granted, even if the mother is not aged or infirm. That is in the Royal Commission's Report and that is what I have embodied in this Clause. This proposal is one more illustration that every one of these concessions may be treated as a precedent for asking for more, but I am bound to stand in this matter where the Royal Commission drew the line.

Sir D. MACLEAN: May I suggest, for the purpose of clearing up what may be a point of doubt in the minds of the authorities who have to administer this Section, that words be added after the words "widowed mother" as follows: "if not incapacitated as aforesaid"? As it stands it is rather difficult to gather really what the Clause means. As it runs it reads:
If the claimant proves that he maintains at his own expense any person being a relative of his or of his wife who is incapacitated by old age or by infirmity from maintaining himself, or his or his wife's widowed mother—
and so on. The Chancellor of the Exchequer has explained to us he means that the man's mother or his wife's widowed mother, although not incapacitated by old age or infirmity, shall still be entitled to the benefits of the Clause. But that is by no means clear. It is not only the experts in Income Tax who will have to deal with this matter; it will have to be dealt with by people who are by no means trained in the law, and if we can, without introducing undue verbiage, assist to make the Clause a little more clear, I think we should do so.

Mr. CHAMBERLAIN: The right hon. Gentleman is dealing, not with the Amendment now before the Committee, but with a quite different Amendment. I suggest we should dispose of the Amend-
ment first. I may say that, subject to consultation with my legal advisers, I shall be prepared to accept some form of words either now or on Report, although I believe them, personally, to be wholly unnecessary.

Sir F. HALL: I am glad the right hon. Gentleman has been able to make this concession, I hope he will not think that because we have got a certain concession we are therefore necessarily going to press for more. It is all very well to say that this matter has been before the Royal Commission on Income Tax. I do not like the right hon. Gentleman to come down here and say we must take the Report of the Royal Commission and nothing more. I quite realise that a great deal of care and attention has been given to this matter by the members of the Royal Commission, but there are heaps of cases which could not possibly have been presented to that body, and if hon. Members are able to bring forward reasonable suggestions, I do think they are justified in expecting they shall receive due consideration at the hands of the right hon. Gentleman and of the Committee

Sir R. NEWMAN: I do not propose to divide the Committee on this Amendment, but I would like to say, with all due respect to the Chancellor of the Exchequer, that I cannot be accused of wishing to ask for more. I want the right hon. Gentleman to face a particular position, the position of the son who is maintaining a deserted mother. That position is just as difficult as that of the man who is maintaining his mother who happens to be a widow. If we may take it that the Chancellor of the Exchequer is willing to consider how that case can be met, I will withdraw my Amendment.

Captain BENN: I object to the withdrawal. This is a very small matter, but surely the Chancellor of the Exchequer might undertake to consider the point between now and the Report stage. There cannot be very many cases of this nature, but I do suggest that the deserted wife is in practically the same position financially as the woman who is a widow. The right hon. Gentleman yesterday made a concession in regard to cigars, and surely a deserted wife is equally entitled to consideration.

Amendment negatived.

Sir D. MACLEAN: May I now move the insertion of the words which I suggested just now? I am not particular as to the exact form.

Mr. CHAMBERLAIN: I am willing to accept the Amendment on the Paper—to add the words, "whether incapacitated or not".
Amendment made: In Sub-section (1), after the word "mother" ["wife's widowed mother"] insert the words "whether incapacitated or not".—[Sir D. Maclean.]

Colonel NEWMAN: I beg to move, in Sub-section (1), to leave out the word "twenty-five" ["twenty-five pounds a year"] and to insert instead thereof the word "thirty".
I do not know whether the Royal Commission on Income Tax laid down any dictum with regard to these figures. I do not think they did, but I want to get some reason why "twenty-five" was inserted. It seems to some of us a very insidious and unfair figure, because it just cuts out the old age pensioner. We do not want him to be cut out. It seems rather cruel that because he gets a pension of 10s. a week, which brings him £1 over the £25, this particular relief should be withheld.

Mr. CHAMBERLAIN: I do not know whether I am rash, but I am inclined to accept the Amendment standing in the name of the right hon. Gentleman for Platting (Mr. Clynes), which proposes to substitute "fifty" for "twenty-five".

Colonel NEWMAN: In those circumstances, I beg to ask leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

Colonel NEWMAN: In the absence of the right hon. Member for Platting, I beg to move, in Sub-section (1), to leave out the word "twenty-five" ["twenty-five pounds a year"] and to insert instead thereof the word "fifty".

Captain BENN: I should like to thank the Chancellor of the Exchequer for this concession. It is a very important one, and it will be received with gratitude by a large number of people.

Mr. WATERSON: As my name is down as one of the supporters of this Amendment, I also would like to thank the right
hon. Gentleman for what he has done in, this direction, and also the hon. and gallant Member for Finchley (Colonel Newman) for his support.

Amendment agreed to.

Captain BENN: I beg to move, in Subsection (1), to leave out the word "twenty-five" ["deduction of twenty-five pounds"] and to insert instead thereof the word "fifty".

Colonel WEDGWOOD: Ought not the Amendment to be moved by the right hon. Member for Miles Platting in whose name it is down, or by one of the other hon. Members whose name is attached to it?

Mr. WATERSON: I am quite prepared to move it.

The DEPUTY-CHAIRMAN (Sir E. Cornwall): It really does not matter.

Mr. CHAMBERLAIN: I do not know whether it is being assumed that this is a correlative Amendment to the one we have just passed, but I should like to inform the Committee that it constitutes an entirely different proposition.

Mr. WATERSON: I beg to support the Amendment. I believe it is absolutely essential that these words should be put in, seeing that we have altered the figure in the preceding line of the Sub-section. We look upon it merely as a case of grammatical phrasing.

Sir G. YOUNGER: It doubles the amount.

Colonel WEDGWOOD: It seems to be of Vital importance that the allowance made in these cases should be a substantial allowance, and that is why we ask that it should be raised from "twenty-five" to "fifty." It is true it is something different from what the Chancellor of the Exchequer has already agreed to, but I hope he will admit that this is a natural corollary of his concession. We want to make that concession very real.

Mr. CHAMBERLAIN: The concession I made on the previous Amendment was gratefully accepted by hon. Members, who cordially recognised my readiness to make it, but that is no reason why I should be expected to support an absolutely different proposition. I am
not sure that the hon. and gallant Member (Colonel Wedgwood) has taken the trouble to find out either what the first Amendment was or what the present one is. He says it is a natural corollary, but I can assure the Committee it is not. The argument he has put forward is not an encouragement to make further concessions. The Amendment, certainly, could not be supported by the line of argument which would have been advanced in support of the last Amendment had I put hon. Members to the trouble of arguing it.

Amendment negatived.

Sir H. NIELD: I beg to move, at the end of Sub-section (1) to insert the words
And the like reduction shall be made in the case of a claimant who by reason of old age or infirmity is compelled to depend upon the services of a daughter resident with and maintained by him or her.
8.0 P. M.
The Royal Commission are not omniscient, and, therefore, I think I can safely state that such a case as this was not considered by them. We are dealing now with people who have to eke out an existence in these days of high prices, which make life intolerable to them. The object of this Amendment is that, in the case of an old man or an old woman, so old that they cannot look after themselves, and are bound to bring in a female relative—I have limited it to a daughter—to look after them, they shall be given an allowance on their meagre income, reduced as it is by direct and indirect taxation. It is only the smaller allowance of the Income Tax on £25 that will operate here. It will not go far towards maintaining an able-bodied person, but it makes a great difference to poor people.

Mr. CHAMBERLAIN: Again I say that am not sure whether I am wise, but, if the Committee are pleased to accept this Amendment, I shall not oppose it.

Amendment agreed to.

Clause, as amended, ordered to stand part of the Bill.

CLAUSE 22.—(Reduced rate of tax on first two hundred and twenty-five pounds of taxable income.)

The rate at which the first two hundred and twenty-five pounds of the taxable income of an individual shall be charged to income tax shall be half the standard rate of tax.

Motion made, and Question proposed, "That the Clause stand part of the Bill."

Colonel WEDGWOOD: This Clause deals with the rate at which the first £225 shall be taxed, and I want to get from the Chancellor of the Exchequer some statement as to the method by which the present charge of half the standard rate of tax is applied. It is very difficult to understand this Income Tax law. If the right hon. Gentleman would tell us exactly what is the meaning of this Clause, and how far it affects these rebates, I should be very grateful, and I think the Committee also would be glad to get the iniformation.

Mr. BALDWIN: I agree with my hon. and gallant Friend that these points are difficult to follow. The Royal Commission recommended a method of assessing Income Tax completely different from that which has been the practice hitherto. Hitherto a limit of amount has been fixed, and at various times alteratioins were made in the grading of the taxation imposed, going up by jumps according to income, until the rising tax was merged in the full tax. If my hon. and gallant Friend has studied the White Paper that was published on this subject, he will remember that the system embodied in this Bill is somewhat different. In the case of earned income, the amount of income is taken, and there is a fixed deduction of one-tenth. That deduction, however, must not exceed £200, from which it follows that the deduction of one-tenth is allowed until the income amounts to £2,000 a year. The net sum arrived at after that deduction has been made is called the "assessable income," and from that there is deducted the £225 which is allowed in the case of a married couple or £125 in the case of a single individual, and, in addition, such other deductions as are prescribed in the Bill in respect of dependants and so forth. The ultimate sum arrived at is called the "taxable income." Of that "taxable income," the first £225 is taxed at half the standard rate. I see my hon. and gallant Friend blinking under these statements, but I assure him that they are fairly simple when you get used to them, and I hope I am making myself clear. The first £225 of "taxable income" is charged at half the standard
rate, that is to say, at 3s. in the £1. After that, the full rate is charged. The net result of this change—which, as I have said, is much simpler than it looks — is to give substantially more relief right through the scale on all the lower incomes than was given under the old system; and it does away at once with that very complicated series of differing rates of Income Tax which made the old system so difficult to understand. I am quite aware that, at first, it may be a little difficult for taxpayers; they will have to seek the aid of their local surveyors until they are accustomed to making these calculations. When they once get accustomed to it, I am sure the simplicity of the scheme and the equity of graduation will carry conviction.

Sir F. HALL: This is a very important point, and it should be plainly realised throughout the country. Are we to understand that the first £225 is to be charged at half the standard rate, irrespectively of the amount of the income, or is that benefit unobtainable on any income over a certain fixed amount?

Mr. BALDWIN: It applies all the way through.

Colonel WEDGWOOD: As I understand it, it merely refers to the earned incomes, and not to the unearned incomes.

Mr. BALDWIN: The £225 is common to both. The earned income gets the benefit of the deduction of one-tenth, and the unearned income does not.

Sir H. NIELD: Might I suggest that the right hon. Gentleman might ask his advisers to issue, either through the Press or directly, a model form to help those who have not yet been able to grasp this Chinese puzzle?

Mr. BALDWIN: I imagine that the explanatory forms have already been circulated, but certainly they will be circulated throughout the country. It is of the utmost importance that people should realise the present basis of assessment.

Sir H. NIELD: I mean a model form assuming certain figures.

Major ENTWISTLE: My hon. and gallant Friend (Colonel Wedgwood) has
evidently not seen the graphs which were issued by the Government. I think they explain very fully exactly the relative positions of the lower incomes under the new system and under the old. The married persons and particularly those with smaller incomes come out much better under the new scale than under the old one. The graphs make the position very clear, and I suggest that more publicity should be given to them.

CLAUSE 23.—(No relief where individual not resident in the United Kingdom.)

(1) Subject as hereinafter provided, no allowance in respect of earned income, and no deduction from assessable income, shall be given or made, and Income Tax on the first two hundred and twenty-five pounds of the taxable income shall not be chargeable at the reduced rate, under the foregoing provisions of this Part of this Act, and no relief shall be granted under Section thirty-two of the Income Tax Act, 1918, in the case of any individual who is not resident in the United Kingdom:

Provided that the foregoing provision shall not apply in the case of any individual who satisfies the Commissioners of Inland Revenue that he or she—
(a) is a British subject; or
(b) is a person who is or has been employed in the service of the Crown, or who is employed in the service of any missionary society or in the service of any native State under the protection of His Majesty; or
(c) is resident in the Isle of Man or the Channel Islands; or
(d) has previously resided within the United Kingdom and is resident abroad for the sake of health; or
(e) is a widow whose late husband was in the service of the Crown;
so, however, that no such allowance, deduction, reduction of rate, or relief as aforesaid shall be given so as to reduce the amount of the Income Tax payable by that individual below an amount which bears the same proportion to the amount which would be payable by him by way of tax if the tax were chargeable on his total income from all sources, including income which is not subject to Income Tax charged in the United Kingdom, as the amount of the income subject to Income Tax so charged bears to the amount of his total income from all sources.

(2) Any person who is aggrieved by a decision of the Commissioners of Inland Revenue under this Section may appeal to the Special Commissioners.

Mr. G. LOCKER-LAMPSON: I beg to move, in Sub-section (1, d) at beginning, to insert the words "is a person of British birth and."
Under paragraph (d), apparently the Chancellor is going to allow a person who is not of British birth, and leaves the United Kingdom and goes abroad for the sake of his health, to obtain relief. I do not quite see why we should give relief to a person who is not a British subject and leaves this country and very likely goes back to his own country. I do not know whether that is intended. My Amendment would safeguard an English-woman who has married someone who is not a British person. It is quite right if she goes abroad for her health that she should have some relief, but I do not see why we should give a privilege to a person who is not of British birth.

Mr. BALDWIN: I hope my hon. Friend will not press this Amendment. It is a distinction which has not been made before in regard to this matter, and I can see no valid reason why a person who does not happen to be of British birth, a resident of this country, and who takes up foreign residence bonâ fide and approved by the Commissioners of Income Tax, should be deprived of this benefit. It appears to me there would be something invidious in putting into the statute in a case of this kind a disfranchising Clause, as it were, against bonâ fide residents in this country. I can quite understand my hon. Friend's feelings, because many of us still feel that we do not want any advantages which are given to English people to be given to Germans, but it is not necessarily Germans. There are genuine cases of people who have lived in this country for the best part or all their lives who belong to friendly and Allied nations, and I do not think we ought to put them into a statute in this way, taking from them a privilege which is enjoyed by all others who are resident in this country if and when the circumstances arise. I can assure the hon. Member the point is a very small one indeed, and the cases which would be ruled out by his Amendment are infinitesimal in number.

Sir D. MACLEAN: I am not surprised at my right hon. Friend's statement, because he and I worked together for seven years on Committees which, although they might reveal to us the dangers of many aliens in this country, at the same time made very clear the very large number of residents in this country who, although aliens, and indeed
technically enemy aliens, were very good citizens indeed, and if this Amendment was allowed to be inserted, really it would make the position somewhat ridiculous. A person previously residing in the United Kingdom who only left this country for the sake of his health. So that he could not under normal circumstances safely reside here any longer. That is the position. What is proposed to be added is that he should also be a person born in his country. I learnt in the course of my experience in those Committees that many people who were born in this country were very bad citizens indeed, and, further, that many of them were actually allied with our enemies. The more you analyse what these apparently simple words mean when you come down to the actual experience of those who know what they have meant, the more one feels gratified that my right hon. Friend is disinclined to accept the Amendment.

Sir H. NIELD: The occasion has afforded my right hon. Friend another opportunity of demonstrating the affectionate regard with which he holds the subjects of other countries.

Colonel WEDGWOOD: The liberty of England!

Sir H. NIELD: The liberty of England is dead as a door-nail. The liberty of Bolshevik Russia! The Committee knows my views, and I am not prepared to support the suggestion of my hon. Friend, but I think the right hon. Gentleman (Mr. Baldwin) would be wise to put some limit as to what residence means—"has previously resided continuously for five years" or whatever he chooses to term it so as to get hold of a person who has, at any rate, resided for a definite time here. We have had quite enough of the birds of passage who come here for mischief, and I do not see why we should allow the Finance Bill with these exemptions to be used, as it undoubtedly will be used, by the slim personages who cross for the purpose of mischief, and are crossing, and are making a good deal of the trouble which we have to contend with now in all parts of the Empire. I sincerely hope, whilst I do not associate myself with the idea that a bonâ fide resident, though born in a foreign country, who has been here for a definite
time, should be excluded. I think there should be some limit put on.

Amendment negatived.

Mr. G. LOCKER-LAMPSON: I beg to move, in Sub-section (1, d) to leave out the word "health" ["for the sake of health"] and to insert instead thereof the words "of his own health or that of his wife."
This is the case of a man who goes abroad for the sake of his wife's health. It seems to me only reasonable. You treat the income of a man and wife as one, but if he is compelled to live abroad for the sake of his wife's health, you do not treat it as his own health, as you ought to. If you treat both incomes as one, you ought to treat the case of the wife's health as though it were the man's health for the purpose of living abroad. The right hon. Gentleman will probably say it will lead to fraud and evasion, but I think it will be quite easy to get a doctor's certificate to show bonâ fides. It seems to me a very reasonable Amendment.

Mr. BALDWIN: My hon. Friend will be relieved to hear that the words
is resident abroad for the sake of health
have always been interpreted as meaning the husband or the wife. I have no objection to inserting the proposed words.

Captain W. BENN: We are in danger by this Amendment of doing less than before. The words "is resident abroad for the sake of health" have been understood in administration to be for the sake of the health of the man, his wife or his family. By including the specific words now proposed it may well be that the authorities may not make an allowance in respect of people who are resident abroad because they may have sick children. We ought to consider this matter carefully.

Mr. LOCKER-LAMPSON: I see the point raised by the hon. and gallant Member, and I certainly do not want to do anything that will exclude anybody from the benefit of the Bill; but I should like to see these specific words made statutory. The words might be "is resident abroad for the sake of his own health or the health of his wife or children."

Captain BENN: Supposing a man of small means lives abroad with his mother. She might be excluded even by the amended words suggested. When the Financial Secretary to the Treasury says the words now in the Bill are read by the Department in the widest possible sense, it will be better to leave them as they are rather than have them limited.

Mr. BALDWIN: Perhaps my hon. Friend, in view of what has been said, would be content to withdraw this Amendment. I will undertake to look into the matter, and if I find that the words in the Bill give everything that my hon. Friend desires I will say so on Report, but if not, and the words he proposes can be inserted on Report without having any prejudicial effect, I will agree to insert them.

Mr. LOCKER-LAMPSON: On that understanding, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Motion made, and Question proposed, "That the Clause stand part of the Bill."

Colonel WEDGWOOD: This Clause exempts from rebates people resident abroad who are not British subjects. Are Indians British subjects in the sense that they are entitled to rebates if they hold shares in English companies? We ought to facilitate the investment of money in British companies. There are at the present times countless reasons why companies should register themselves in India or East Africa or elsewhere. Are we giving the very best terms to people who invest in British companies? Indians must be British subjects and, therefore, they will be entitled to these rebates, even though they never come to England. How about Egypt? If Egyptians invest in British companies are they to be deprived of any chance of securing rebates? Are those countries which are under our mandate excluded from the privilege of securing rebates? It ought to be our object to make the whole of the British Empire uniform in this respect and to see that everybody under the British flag has the same rights. I want to be quite certain that all British subjects, whether they are technically British subjects or practically British subjects in protectorates or elsewhere, have the privilege of investing
in British companies and securing rebates. I want to see that nothing is done to check people who live in our protectorates or our mandated areas from investing in British companies. We must make it quite clear that the wider the circle of the Empire and the wider the number of British citizens the wider is the complete comity of the nation, and that we are doing nothing whatever to restrict companies from registering in the United Kingdom when they have so many incentives to register themselves in the Channel Islands, in India, or in East Africa, where they escape from our penal law.

Mr. BALDWIN: The answer to the hon. and gallant Member is that, subject to the limitations expressed in the Clause, the term "British subject" covers a British subject in whatever part of the British Empire he may be residing.

Colonel WEDGWOOD: That does not include mandated territories?

Mr. BALDWIN: No.

Colonel WEDGWOOD: Nor Egypt?

Mr. BALDWIN: No.

CLAUSE 24.—(Right of husband and wife to claim relief separately.)

(1) Where on an application made for the purpose under the provisions of the Income Tax Acts, Income Tax for any year is assessable and chargeable on the incomes of the husband and wife respectively as if they were not married:—
(a) All the provisions of the Income Tax Acts relating to claims for an allowance in respect of earned income and deductions from assessable income and for relief under Section thirty-two of the Income Tax Act. 1918, and the proof to be given with respect thereto, shall apply as if they were not married; and
(b) The income of the husband and the wife shall be aggregated in estimating the amount to be repaid or allowed in respect of the allowances or deductions aforesaid, and for the purpose of the reduction of the rate of tax on the first two hundred and twenty-five pounds of the taxable income, and the total amount of any allowances or deductions given or made in respect of the incomes of husband and wife shall not exceed such an amount as would have been given on account of those allowances and deductions if such an application as aforesaid had not been made, and no reduction of the rate
1558
of tax shall be allowed in respect of more than two hundred and twenty-five pounds of the taxable income in all; and
(c) The benefit of any such allowance or deduction and the reduction of the rate of tax on the first two hundred and twenty-five pounds of the taxable income may be given either by way of reduction of the amount of the tax to be paid, or by repayment of any excess of tax which has been paid, or by both of these means, as the case requires, and shall be given to the husband and the wife as regards the allowance in respect of earned income in proportion to the amounts of their respective earned incomes, and as regards deductions from assessable income and the reduction of the rate of tax in proportion to the amounts of their respective assessable incomes:
Provided that in the case of relief given under Section thirty-two of the Income Tax Act, 1918, the benefit of the relief shall be given to the husband or wife, as the case may be, by whom the payment is made, and in the case of a deduction claimed in respect of a child under Sub-section (2) of the foregoing Section of this Act relating to the deduction in respect of children, or in respect of any person under the foregoing section of this Act relating to the deduction in respect of dependent relatives, shall be given to that one of the married persons by whom the child or relative is maintained; and
(d) For the purpose of any of the above-mentioned allowances or deductions or reliefs a return may be made by the husband or the wife of the total income of the husband and wife; but if the Commissioners of Inland Revenue are not satisfied with the return they may obtain a return from the wife or husband, as the case may be.

(2) The Commissioners of Inland Revenue may require returns for the purposes of this Section to be made at any time, and the provisions of the Income Tax Acts relating to penalties for neglect or refusal to deliver or for delay in delivering true and correct statements of profits or gains shall, with the necessary modifications, apply in the case of the neglect or refusal to make or wilful delay in making any such return.

Motion made, and Question proposed, "That the Clause stand part of the Bill."

Sir D. MACLEAN: I regard this as a minor, but welcome, attempt to start the codification of a complex part of our taxing laws. For the first time for a good many years we have a Clause which contains within the ambit of its own
provisions something like a clear statement of the law relating to the right of husband and wife to claim relief separately. I would urge upon the Treasury that this good example should be followed as often as possible. The right of the husband and wife to claim relief separately does not arise here for the first time; it was granted by a previous Statute. I would ask my right hon. Friend whether it would not be possible, in view of the very complex provisions which Income Tax necessarily involves, and in view of the fact that hundreds of thousands of persons are affected by this provision, and that people are often quite unable or unused to get professional assistance, that the Government may take some adequate opportunity of issuing through the Press—not by means of Government pamphlets, which so often do not get further than the issue, and are soon relegated to the dust-bin—a statement showing clearly what the position really is as between the rights of husband and wife to claim relief separately. Clear as this Clause is to the lawyer, it is very difficult of elucidation, as these things must necessarily be, to the lay members of the public, and it would be well if, when this Bill reaches the Statute Book, there should be some means of informing the public as to what are their new rights in relation to Income Tax.

Mr. BALDWIN: I think that my right hon. Friend's request is a reasonable one. I sympathise with him in what he says about the mystery of the language to laymen. There is one Clause in this Bill of which I do not understand a word, but I will not say what it is. I will consider favourably the request which he has made.

CLAUSE 25.—(Amendment of Section 82 of 8 & 9 Geo. 5, c. 40.)

Section thirty-two of the Income Tax Act, 1918 (which relates to relief in respect of life insurance premiums), shall be amended as follows:—
(1) For the words in Sub-section (1) from "(b) who is" to the end of the Subsection there shall be substituted the followings words:—
"(b) who is under any Act of Parliament or under the terms or conditions of his employment liable to the payment of any sum or to the deduction from his salary or stipend of any sum for the purpose of securing a deferred annuity to his widow
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or provision for his children after his death;
shall, subject as hereinafter provided, be entitled to have the amount of tax payable by him reduced by a sum representing tax at the appropriate rate on the amount of the premium paid by him for any such insurance or contract or on the amount of the sum paid by him or deducted from his salary or stipend.
"For the purposes of this Section the expression 'appropriate rate' means—
"(i) where the total income of the claimant from all sources estimated in accordance with the provisions of the Income Tax Acts does not exceed one thousand pounds, half the standard rate of tax:
"(ii) where the total income of the claimant from all sources estimated as aforesaid exceeds one thousand pounds but does not exceed two thousand pounds, three-fourths of the standard rate of tax:
"(iii) where the total income of the claimant from all sources estimated as aforesaid exceeds two thousand pounds, the standard rate of tax."
(2) At the end of Sub-section (2) there shall be inserted the words "at the appropriate rate."
(3)In paragraph (c) of Sub-section (3) after the words "or not" there shall be inserted the words "the amount of" the tax calculated at the appropri- "ate rate on an amount equal to."
(4) In paragraph (d) of Sub-section (3) for the words "exceed one hundred pounds in all" there shall be substituted the words "in any case exceed "the amount of the tax calculated at "the appropriate rate on one hundred "pounds."
 (5) In paragraph (e) of Sub-section (3) for the words "three shillings in the pound' there shall be substituted the words "half the standard rate of tax."
(6) In the proviso to paragraph (e) of Subsection (3) after the word "business" there shall be inserted the words "or" for the benefit of the widow of any "such employé or person or of his "children or other dependants after "his death."
(7) At the end of the Section there shall be inserted the following new Sub-sections:—
(8) "Where a premium is paid by a wife out of her separate income in respect of an insurance on her own life or the life of her husband or a contract for any deferred annuity on her own life or the life of her husband, the same allowance of tax shall be made as if the premium were a premium paid by her husband for an insurance on his own life or for a contract of deferred annuity on his own life, and this Section shall apply accordingly.
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(9) "Where the tax ultimately payable by any person after deducting the allowance under this Section is greater than the amount of tax which would be payable if the total income of that person exceeded one thousand pounds or two thousand pounds, as the case may be, the allowance under this Section shall be increased by a sum representing the amount by which tax at one-fourth of the standard rate on the amount of the premiums or payment in respect of which the allowance is made exceeds the amount of the tax at the standard rate on the amount by which the total income falls short of one thousand pounds or two thousand pounds, as the case may be."

Colonel BURN: I beg to move in Subsection (6) after the word "the" ["the widow"] to insert the words "wife or."
This Amendment remedies in the great majority of cases the great injustice which w as done to widows' funds by withdrawing the benefit of allowance of Income Tax on premiums which they pay, but it still leaves unredressed the hardship which non-allowance of the tax will quite needlessly inflict on many Members of societies of this description. Superannuation funds in connection with corporations, the Army, Navy, and Civil Service and religious bodies carry out a great and beneficent work. Many members of such funds desire to provide for their dependents, and there is an appreciable number who cannot provide such benefits contingently on their own death, for the simple reason that owing to the breakdown of their health their own lives are uninsurable, and therefore they are driven to make provision which is not dependent on that contingency. I think that the Amendments which are submitted will remedy all such cases of hardship so far as widows' funds at least are concerned.

Mr. BALDWIN: I accept the Amendment.

Amendment agreed to.

Further Amendment made: In Subsection (6) leave out the words "after his death."—[Sir D. Maclean.]

Motion made, and Question proposed, "That the Clause, as amended, stand part of the Bill."

Sir D. MACLEAN: This Clause is a very useful example of what legislation by reference means. No one can construe it without having many Acts of Parliament before him, and I would im-
press on my right hon. Friend the need for codifying these Statutes, before what I hope is the distant date when he ceases to hold the office which he so well adorns.

CLAUSE 26.—(Relief in Respect of Dominion Income Tax.)

(1) If any person who has paid, by deduction or otherwise, or is liable to pay, United, Kingdom Income Tax for any year of assessment on any part of his income proves to the satisfaction of the Special Commissioners that he has paid Dominion income Tax for that year in respect of the same part of his income, he shall be entitled to relief from United Kingdom Income Tax paid or payable by him on that part of his income at a rate thereon to be determined as follows:—
(a) If the Dominion rate of tax does not exceed one-half of the appropriate rate of United Kingdom tax, the rate at which relief is to be given shall be the Dominion rate of tax:
(b) in any other case the rate at which relief is to be given shall be one-half of the appropriate rate of United Kingdom tax.
For the purpose of this Section the expression "the appropriate rate of United. Kingdom tax" means the rate at which the claimant for the year to which the claim relates has borne or is liable to bear United Kingdom Income Tax, and where the claimant is liable to United Kingdom Super-tax the expression "the appropriate rate of United Kingdom tax" means a rate equal to the sum of the rates at which he has borne or is liable to bear United, Kingdom Income Tax and Super-tax. respectively for that year.

(2) Where a person has not established his claim to relief under this Section for any year of assessment before the first day of January in that year, the relief shall be granted by way of repayment of tax.

(3) Where by reason of the allowance of relief under this Section the rate of United Kingdom Income Tax deducted from or paid in respect of any part of the income of any individual is less than the standard rate, and the rate of the relief so allowed is greater than the rate appropriate to the case of that individual, such an adjustment shall be made in allowing to that individual any relief to which he may be entitled under the provisions of this Part of this Act relating to the rate of tax on the first two hundred' and twenty-five pounds of taxable income as may be necessary to secure that the amount of United Kingdom Income Tax finally paid' or borne by him shall be equal to the amount which would have been paid or borne if the relief under this Section had in the first instance been given at the rate appropriate to his case.

(4) Notwithstanding anything in the Rules applicable to Case IV. or Case V. of Schedule D or in any other provision of the
Income Tax Acts no deduction shall be made on account of the payment of Dominion Income Tax in estimating income for the purposes of United Kingdom Income Tax, and where Income Tax has been paid or is payable in any Dominion either on the income out of which income subject to United Kingdom Income Tax arises or is received, or as a direct charge in respect of that income, the income so subject to United Kingdom Income Tax shall be deemed to be income arising or received after deduction of Dominion Income Tax and an addition shall in estimating income for the purposes of the United Kingdom Income Tax be made to that income of the proportionate part of the Income Tax paid or payable in the Dominion in respect of the income out of which that income arises or is received together with the full amount of any Dominion Income Tax directly charged or chargeable in the Dominion in respect of that income.

Provided that—
(a) where any income arising or received as aforesaid consists of dividends which are entrusted to any person in the United Kingdom for payment and the Special Commissioners are satisfied that the person so entrusted is not in a position to ascertain the amount of the addition to be made under this Sub-section, the assessment and charge may be made on the amount of the dividends as received by the person so entrusted, but in any such case the amount of the addition shall be chargeable on the recipient of the dividends under the Case VI. of Schedule D; and
(b) where under the laws in force in any Dominion no provision is made for the allowance of relief from Dominion Income Tax in respect of the payment of United Kingdom Income Tax, then in assessing or charging Income Tax in the United Kingdom in respect of income assessed or charged to Income Tax in that Dominion a deduction shall be allowed in estimating income for the purpose of United Kingdom Income Tax of an amount equal to the difference between the amount of the Dominion Income Tax paid or payable in respect of the income and the total amount of the relief granted from the United Kingdom Income Tax in respect of the Dominion Income Tax for the period on the income of which the assessment or charge to United Kingdom Income Tax is computed.
In this Sub-section the expression "dividends" includes any interest, annuities, dividends, shares of annuities, pensions, or other annual payments or sums in respect of which tax is charged under the Rules applicable to Schedule C or under Rule VII. of the Miscellaneous Rules applicable to Schedule D.

(5) Where under Rule 20 of the General Rules applicable to Schedules A, B, C, D and E, a body of persons is entitled to deduct Income Tax from any dividends, tax shall not in any case be deducted at a rate
exceeding the rate of the United Kingdom Income Tax as reduced by any relief from that tax given under this section in respect of any payment of Dominion Income Tax.

(6) Where under the law in force in any Dominion provision is made for the allowance of relief from Dominion Income Tax in respect of the payment of United Kingdom Income Tax, the obligation as to secrecy imposed by the Income Tax Acts upon persons employed in relation to Inland Revenue shall not prevent the disclosure to the authorised officer of the Government of the Dominion of such facts as may be necessary to enable the proper relief to be given in cases where relief is claimed both from United Kingdom Income Tax and from Dominion Income Tax.

(7) The Commissioners of Inland Revenue may from time to time make regulations generally for carrying out the provisions of this Section, and may, in particular, by those regulations provide:—
(a) For making such arrangements with the Government of any Dominion to which the last preceding Sub-section applies as may be necessary to enable the appropriate relief to be granted:
(b) For prescribing the year which in relation to any Dominion Income Tax is, for the purposes of relief under this Section, to be taken as corresponding to the year of assessment for the purposes of United Kingdom Income Tax.

(8) In this Section:—
(a) The expression "Dominion" means any British possession, or any territory which is under His Majesty's protection or in respect of which a mandate is being exercised by the Government of any part of His Majesty's Dominions:
(b) The expressions "United Kingdom Income Tax" and "United Kingdom Super-tax" mean respectively Income Tax and Super-tax chargeable in accordance with the provisions of the Income Tax Acts:
(c) The expression "Dominion Income Tax" means any Income Tax or Super-tax charged under any law in force in any Dominion, if that tax appears to the Special Commissioners to correspond with United Kingdom Income Tax or Super-tax:
(d) The expression "Dominion rate of tax" means the rate determined by dividing the amount of the Dominion Income Tax paid for the year by the amount of the income in respect of which the Dominion Income Tax is charged for that year, except that where the Dominion Income Tax is charged on an amount other than the ascertained amount of the actual profits the Dominion rate of tax for the purposes of this Section shall be determined by the Special Commissioners.

For the purposes of this Section the rate of United Kingdom Income Tax
shall be ascertained by dividing by the amount of the taxable income of the person concerned the amount of tax payable by that person on that income before deduction of any relief granted in respect of life assurance premiums or any relief granted under the provisions of this Section, and the rate of United Kingdom Super-tax shall be ascertained by dividing the amount of the Super-tax payable by any person by the amount of that person's total income from all sources as estimated for Super-tax purposes.

Amendment made: In Sub-section (4, a), leave out the word "the" ["the Case VI."].—[Mr. Baldwin.]

Motion made, and Question proposed, "That the Clause, as amended, stand part of the Bill."

Sir F. YOUNG: I happen to be Chairman of an Association which has carefully watched this question for some two or three years, and contributed to some extent to the provisions of this Bill, and we feel grateful to the Government for having accepted so readily the recommendations of the Royal Commission. While the proposals do not go the full length of our desire, we feel that the Government has not been ungenerous in its treatment of what is a very difficult matter. As regards private individuals, we feel the great force of the point that there should be more or less equality of taxation of individuals living in this country. On that ground there is a great deal to be said for the provisions of this Clause which aim, at any rate, at putting individuals on an equal footing of taxation, whether their investments are within the United Kingdom or partly or wholly in other parts of the Empire. The idea, I believe, will be accomplished if the Dominions Governments pass reciprocal legislation, as is suggested by the Royal Commission. I would like to draw attention to the fact that whilst the provisions of this Clause improve the position of most of those who are affected by this double taxation within the Empire, as a matter of fact, the operation of the Clause makes the position of trading companies somewhat worse. I do not know whether the authorities are really aware of that fact. I am taking the case of those trading companies most affected by the double taxation, those which were operating chiefly in Australia, where taxation was perhaps higher than in any other part
of the Dominion. The taxation in Australia on companies was somewhat favourable from the point of view of double taxation, and when the relief was fixed, as under the last Financial Statute, at 2s. 6d. in the pound, it afforded almost entire relief to the companies, inasmuch as they were able in the first place to deduct the tax they had already paid in Australia. Under this Clause they are not allowed to deduct the tax which they pay out there, and that is quite right. I am not quarreling with the general proposition, but the effect of it is that under the provisions of this Clause, inasmuch as they are not able to deduct that tax and their relief is only approximately what it was under the Financial Act of last year, they are in a worse position than they were then. I think it is a point which the Chancellor of the Exchequer might take into consideration, not respecting this particular Bill, but for the future, because companies are in a very different position from private individuals in relation to this country.
It is of supreme importance that many of these Anglo-Dominion companies should have their headquarters in the United Kingdom. It is, of course, of some benefit to them or they would not be here, but it is an immense benefit to this country that they should be here, and we should not, for what is a small matter, do anything to drive them out. I speak more particularly of those companies which are constantly sending out goods to the Colonies and the Dominions. The fact that they are resident here is a considerable guarantee that the goods sent out will come from this country, whereas if they are driven to establish their head offices in the Dominions, they will be much more amenable to the foreign traveller, and there will be considerably less inducement to do trade in this country. That is something which no party in this House would wish to see. There is another matter, in connection with companies, to which I invite the attention of the Chancellor of the Exchequer. It is the fact that Anglo-Dominion companies frequently consist of shareholders, some of whom are resident in this country and some resident in the Dominions. As regards those resident in the Dominions, you have neither of the two factors which constitute the basis of income taxation in this country. You have not
the residence of the shareholder, who is the ultimate taxpayer, and you have not this country as the country of origin as regards the income, or, at any rate, as regards a portion or the bulk of the company. I think that in proportion to the capital which is represented by shareholders living in the Dominions, in proportion to the income actually earned in the Dominions, there should not be taxation levied in this country. That would be a very considerable relief, and would secure to the Government what they might legitimately claim—that such taxation should be paid by individuals living in this country, wherever the income may be earned. If some such provision could be grafted into the scheme of settlement for alleviating the double Income Tax trouble, I believe it would go a long way to prevent companies removing their head offices from this country and establishing themselves in the Dominions.

Sir D. MACLEAN: I should be glad if the right hon. Gentleman would tell us what arrangements, if any, at all corresponding to this proposal in this Clause, have been made or are in process of being made in the Dominions. Is the only quid pro quo which we can get here contained in proviso (b) of Sub-section (4)? What negotiations, if any, are going on between the Government and the Dominions beyond the seas relative to the proposals contained in this Clause?

Lieut.-Commander KENWORTHY: I should like to refer to the concession which is being extended to the mandated territories. It is impossible to do so at any length, because we have not had the terms of a single mandate before the House, with the exception of Nauru Island, which is a very small territory. I think it is rather a bold step to include in this Budget the mandatory territories on the same terms as regards this question of double Income Tax with the Dominions and Protectorates. I suggest it would have been far better if this matter had been left over until next year, when we could have the terms of the mandates before us. Article 23 of the Covenant of the League of Nations lays it down that there shall be complete equality of trade for all nations in the mandated territories, and that the mandate does not give us the right to in any
way favour the trade of our own nationals by any abatements of export duties or preference or anything else.

Major-General Sir N. MOORE: This is the removal of an anomaly.

Lieut.-Commander KENWORTHY: if you remove an anomaly you make a concession.

Sir N. MOORE: It is removing an injustice.

Lieut. - Commander KENWORTHY: You are giving what seems to be a trading advantage to companies registered here and which carry on their trade in the mandated territories. It may not be a matter of very great substance, but I raise it because it may become one of tremendous importance. This question of mandates is going to assume enormous dimensions in the very near future. Has this matter been fully considered from all angles, or is it another instance, as in the Colonial Ministry, of being taken completely by surprise by the terms of Article 23?

Colonel WEDGWOOD: What is sauce for the goose ought to be sauce for the gander. You include within the ambit of the British Empire not only mandated territories but also protectorates, but in Clause 24, dealing with rebates, you exclude all those parts of the British Empire which are not genuine. In Clause 23 Egypt is accepted and the mandated territories are excepted, because you are dealing with unfortunate people who live in those countries and who claim, together with the rest of the community, to get rebates on Income Tax. When it comes to the question of companies domiciled in those countries with their headquarters here, the mandated territories, Egypt and the other protectorates, are put within the Empire. If you are going to regard Egypt or East Africa as part of the British Empire, that ought to be done throughout, and not only when it suits your Exchequer. The want of coordination in this Finance Bill is perhaps natural. It has been got up in a hurry, and it is being rushed through with inordinate speed. There is no reason why next year we should not have this mistake put right and treat every part of the Empire alike. When you give concessions to shareholders in these companies, you should also give concessions
to the citizens resident in those territories.

9.0 P.M.

Mr. BALDWIN: I was very glad of the speech of the hon. Member (Sir F. Young) who introduced this subject, because he has taken a part in this matter and is thoroughly familiar with what is, after all, one of the most abstruse and difficult problems that has recently been faced. I agree with him that the British Government in this matter has been generous, but it was necessary for someone to make a start to deal with an anomaly that had become almost insupportable. Had it not been for the War, this is a matter which must have come up for consideration and decision some years ago. After great labours on the part of the Special Committee, chosen for that purpose by the Royal Commission on Income Tax, this question has been investigated, certain conclusions have been arrived at, and the result has been embodied in this extraordinarily technical and apparently complicated Clause. I gather that my hon. Friend is content now to watch the working of this Clause, fully confident that, as time goes on, and any practical difficulties, anomalies—what you like—may be revealed, they may be attended to as and when the occasion arises. Of course we hope that reciprocal action may be taken in the Dominions, but, so far, I may tell my right hon. Friend who put the question to me we have not yet had time to enter into any negotiations with regard to this matter. The duties of our Revenue Department have been so heavy recently in the preparation of this Bill that there has not yet been time to discuss these matters with the Dominions, but they on their part have now had time to study the report of the Royal Commission themselves. They have back with them now their representatives who dealt with these matters in London, and I have no doubt, when the time comes for us to come to close quarters on this question, we shall find that they will be no less ready to meet us than we have been to meet them. I am quite sure that in practice this Clause is a very fair and an honest attempt to meet what is a new problem or rather a problem new in comparativly recent years, and which affects no other countries in the world in the same way that it does our country, because there are no others that have the
great volume of trading between the Mother Country and the Dominions and the territories overseas.

Sir D. MACLEAN: I asked the right hon. Gentleman about proviso (b).

Mr. BALDWIN: If the right hon. Gentleman will put down a question I will answer it.

Lieut. - Commander KENWORTHY: May I ask one word about the mandatory territories? The Treasury seems to have been as much taken by surprise by the provisions of Article 23 of the Covenant of the League as the Colonial Office admittedly were.

Mr. BALDWIN: My hon. and gallant Friend never takes me by surprise.

Lieut. - Commander KENWORTHY: Not you.

Mr. BALDWIN: The matters which the hon. and gallant Gentleman raises do not take me at all by surprise, but this Clause, deliberately, only applies to the countries which are specified in it.

Sir N. MOORE: Is it not a fact that the representatives in the various Dominions undertook to make favourable representations to their Governments on their return, recommending them to adopt the reciprocal procedure that is outlined in this Bill?

Lieut.-Commander KENWORTHY: I would like to know the meaning of these words in Sub-section (8)—
The expression 'Dominion' means any British possession, or any territory which is under His Majesty's protection or in respect of which a mandate is being exercised by the Government of any part of His Majesty's dominions:

Colonel WEDGWOOD: What parts of the British Empire are there where there is no Income Tax at the present time?

Mr. BALDWIN: I cannot answer off-hand.

Colonel WEDGWOOD: Are not British East Africa and certain other Crown Colonies without Income Tax at the present time, and is it not possible for the right hon. Gentleman to bring some pressure to bear on the Colonial Office to insist on there being not only Income Tax in those Colonies somewhat similar to the
burdens imposed on this country, but also, when they do introduce their Income Tax, they shall have Clauses similar to this introduced, so that in the case of Crown Colonies we shall avoid this scandal.

CLAUSE 27.—(Extension of s. 25 of 9 & 10 Geo. 5. c. 32.)

Section twenty-five of the Finance Act, 1919 (which relates to the tax on income from converted Government securities), shall apply to securities which have been exchanged for five and three-quarter per cent. Exchequer Bonds, 1925, or for any other Government securities may be issued at any time after the commencement of this Act, as it applies to securities which have been accepted as the equivalent of cash in payment for allotments of Victory Bonds.

Amendment made: After the word "securities" ["or for any other Government securities"] insert the word "which."—[Mr. Baldwin.]

Clause, as amended, ordered to stand part of the Bill.

CLAUSE 31.—(Stamp duty on receipts.)

The Stamp Duty chargeable under the heading 'RECEIPT given for, or upon the payment of, money amounting to 2l. or upwards' in the First Schedule to the principal Act, shall be twopence instead of one penny.

The DEPUTY - CHAIRMAN: The Amendment on the Order Paper in the name of the hon. and gallant Member for Shettleston (Rear-Admiral Adair) [to insert at the beginning of the Clause the words, "Except as provided in Section of this Act"] would make a new charge and is, therefore, out of order.
The next Amendment, in the name of the hon. Member for Ealing (Sir H. Nield) [to add at the end of the Clause the words
And any such receipt shall include the acknowledgment for money sent upon or with applications for shares in limited liability companies, and any notice given by or on behalf of a person, firm, or company that no receipt will be given for moneys specified or referred to in such notice or words having by necessary implications such effect shall be deemed a refusal to give a receipt duly stamped in any case where the receipt is liable to duty"] is not needed.
Motion made, and Question proposed, "That the Clause stand part of the Bill."

Colonel WEDGWOOD: I want to enter my protest against the Stamp Duties, because they are doubling the charge for every transaction connected with stocks and shares and property generally, while leaving all charges in connection with real estate as they were. This is a direct penalisation of industry for the benefit of the landed interests. [Interruption.] I am informed that this is not the Stamp Duty, and therefore I will change my remarks. This is an additional charge for receipts, and I hope the Committee understands what it really means. It
means a very large additional charge in connection with all business transactions. This is going to be a direct increase in the cost of living in this country, made by a Government that protests that it will do anything in its power to reduce taxation and the cost of living, and I therefore enter my protest against it.

Mr. HOGGE: This Clause gives legislative sanction to an increase in the amount of money to receipt an ordinary account, and I should rather like to know why it is required to have legislative sanction to increase the amount of Stamp Duty on receipts when the Government can double the charge for ordinary postage without even coming to this House. The penny postage, for instance, was increased automatically a few weeks ago, and many of us who were interested in that question at the time withdrew our opposition because we were told that a Post Office Bill was to be introduced into the House. I believe that Post Office Bill has now been introduced, but it has not yet been read a Second time. I have never yet understood why the Government were able to increase the ordinary penny postage without legislation, and when we come to such an ordinary transaction as the amount that shall be paid for receipting accounts, it requires legislative sanction. On the general question of the amount of the increase, after all it is 2d., and it does not sound much, but it is 100 per cent. [An HON. MEMBER: "Hear, hear!"] Some hon. Member seems to have checked my calculation. We have got a number of these grievances which irritate the business men of the country. After all, we talk a great deal about reconstruction in this House, and about many things we are about to do. Yet we have proposals to increase the charge on telephones and telegrams. We have already had the ordinary postage doubled. Now the Government are going to double the ordinary receipt stamp. If you really want to help the business community of the country, you will not help them, nor oil the wheels of industry, by this sort
of imposition. The result of this kind of thing is to lead to an enormous amount of evasion. A point in this connection has been brought prominently to my notice, and it is in regard to receipts for contributions to charitable institutions. I do not know the experience of other Members of the Committee, but my experience is—and probaly it is the experience of others—that when a contribution is given to a charitable institution you very seldom find the acknowledgment is receipted with a penny stamp. In some cases recently the Inland Revenue authorities have taken up the position, as the result of facts brought to their knowledge, that every contribution made by a charitable individual to a charity requires to have a receipted account for the amount. My right hon. Friend opposite (Mr. Baldwin) shakes his head. I have got some correspondence in front of me on this very point. I did not mean to use it, because I do not want to delay the proceedings of the Committee; and I do want to have my hon. Friends with me in the lump if we go to a Division.
If, however, the right hon. Gentleman doubts what I am saying, I may have to read the whole of this correspondence. As a matter of fact, I think I will spare him that. I will give him a short summary of it. There is the question of stamped receipts, for instance, for such worthy objects as church purposes. [HON. MEMBERS: "Which Church"?] I am sorry Members of the Committee are treating this question in so light a fashion, for every member is interested in the social and progressive work of the churches of the country. Take the large foreign missions of every church in this country. Take the large social undertakings in which they show their interest in the slums of our great cities. It was originally possible, I think, in the experience of every Member of this Committee to send a contribution to the church treasurer for one of these objects, and the receipt did not require to be stamped. The correspondence I have here is from the Inland Revenue authorities, who are now insisting that every charitable contribution given to such a worthy purpose as a foreign mission must be acknowledged with a receipt properly stamped. What is it going to mean if you double the amount of the stamp? It is going to take from
every charitable contribution for one of these great purposes an unfair and unnecessary portion. I end where I started. I am interested to know why it requires legislation to double this amount, when it does not require it in the case of the ordinary postage. Secondly, I should like to know if the Chancellor is prepared to exempt receipts for contributions to charitable purposes from this double duty on account of these important matters in which the people of this country are so deeply interested, and in which, I daresay, the right hon. Gentleman himself is a great believer.

Mr. CHAMBERLAIN: We are acting under the authority of the Post Office Act of 1908. [HON. MEMBERS: "Speak up"] It is there set forth the rates of postage which may be fixed by the Treasury, and the limits within which they may be fixed. We can deal with the penny postage. We cannot deal with some of the other rats with which it is now proposed to deal.

Mr. HOGGE: The penny postage is only one.

Mr. CHAMBERLAIN: In regard to that—

The DEPUTY-CHAIRMAN: I think we must not go into the whole of these Stamp Duties. The hon. Gentleman (Mr. Hogge) was in Order in making the analogy that he did, but we cannot now go beyond the points raised.

Mr. HOGGE: On a point of Order. You yourself, Sir Edwin, heard the Chancellor of the Exchequer say that it is the Treasury which has power to deal with the postage. If the Post Office is the instrument of the Treasury, and we are now discussing the power of the Treasury, then I submit we are in Order.

The DEPUTY-CHAIRMAN: I was not objecting to the explanation of the right hon. Gentleman as to the power of the Post Office, but we have got to other matters to which reference should not be made on the Motion before the Committee.

Mr. CHAMBERLAIN: I think I have answered the question of the hon. Gentleman, which is germane to the discussion. As to the other questions put, I am not sure whether I will be in Order in answering them

Mr. HOGGE: It is the twopenny receipt on charitable contributions to which I should like an answer. If my right hon. Friend, for instance, as I hope he may do some day, was to send a contribution to the funds of the Independent Liberal party, it would require 2d. to acknowledge it.

Mr. CHAMBERLAIN: I quite agree with my hon. Friend opposite that that indeed would be a charity. [An HON. MEMBER: "It would be a very good cause!"] In relation to the 2d. stamp, my answer must be that I could not make the exception which he suggests. His very illustration shows the difficulty of defining a charity. What is a charity? Is it the association of a small number of gentlemen in distress obeying the law of self-preservation in the face of world forces which threaten to sweep them out of existence? Is that a charity? Here is a difficulty in definition of which the Committee will be aware at once. We have another objection, and that is that the larger issues of this question are raised by an Amendment which the Chair, I think, directed should be moved as a new Clause. If we have to make State grants in aid of people in distress, they should be made openly, so that everybody knows exactly what we are doing, and they should not be conveyed by remissions of taxation, so that nobody knows the amount of the assistance which is given. To accede to this request would be to give a most trifling assistance in any single case, and I think this matter might be discussed on the larger issue when we reach the new Clause dealing with this question.

Mr. BOTTOMLEY: I have not troubled the Committee so far in these discussions because, as a fairly old Parliamentary hand, I prefer to wait for the Report stage and then dish up the lessons I have learned. On this proposal, I desire most heartily to support the Government. It was always a mystery to me that the Government should have doubled the duty upon cheques or in other words should have added 100 per cent. to the tax which a man who pays an account has to pay while leaving the person receiving the money alone. Although I am aware that suggestions now do not account for very much, I would like to suggest to the right hon. Gentleman that he might go even
further in this direction, and make the receipt stamp duty an ad valorem duty, so that the person receiving a large amount would pay more than the person receiving a small amount. My experience is that when a person is receiving payment of an account he is not so very particular as to the amount of the stamp.
I am not going to follow what has been said by one of the leaders of one of the oppositions in regard to the tax upon charitable subscriptions. It has been said by the Chancellor of the Exchequer that a subscription to the independent Liberal party in this House might come under the head of a charity, and would carry the full receipt stamp. Might I suggest that subscriptions to the distressed managers of the Coalition Government should come into the same category? I was delighted to hear the right hon. Gentleman say that all these payments should be open and above-board and should bear the full duty upon them. I wish to add in conclusion that whilst the Independent Liberal party may be prepared to receive subscriptions and give receipts with a full stamp, there is another party in this House which receives no subscriptions and consequently gives no receipts. I hope the right hon. Gentleman will consent to make this an ad valorem duty such as other countries have, and I am sure it would bring in an enormous income.

Mr. JOHN GUEST: My objection to this duty is somewhat different to those which have been raised. I do not think it matters much whether the duty is 1d. or 2d., because it is only another addition to the cost of living, and a 2d. receipt stamp will bear very heavily on the working classes of this country. You have to bear in mind that you are doing this at a time when a great many accounts which in past years would have entirely escaped will be brought into this tax. I think the receipts from this source of revenue would have been added to very materially by the increased number of accounts without the imposition of the double stamp. All this taxation comes back to the consumer, and it is taken into account in making out the Bill. I think the Chancellor of the Exchequer might reconsider this proposal as I feel sure that he would derive from the present rate of the stamp quite as much as he will get from the increased stamp duty.

Sir H. NIELD: I regret that the activities of my hon. Friends while I was out at dinner have been so great that was surprised to find that my Amendment had been ruled out of Order. I understand that—

The DEPUTY-CHAIRMAN: We cannot now go back to that question.

Sir H. NIELD: I was only making a reference to it.

The DEPUTY-CHAIRMAN: The hon. Member must address himself to the Question put from the Chair.

Sir H. NIELD: I wish to express my regret that the Chancellor of the Exchequer has not seen his way to adopt the suggestions which I made.

Clauses 32 (Stamp duty on scrip certificates, etc.), 33 (Stamp duty on transfers of stocks and marketable securities), and 34 (Stamp duty on transfer of certain Colonial and Foreign stocks) ordered to stand part of the Bill.

CLAUSE 35.—(Stamp duty on marketable securities transferable by delivery, etc.)

The Stamp Duties chargeable on any marketable securities transferable by delivery under paragraphs (1) (a) and (c), 3, and 4 of the heading "MARKETABLE SECURITY" in the First Schedule to the principal Act, and the Stamp Duty chargeable on marketable securities transferable by delivery, share warrants, stock certificates, and other instruments to bearer under Sub-section (1) of Section four and Section five of the Finance Act, 1899, on stock certificates to bearer under Section eight of the Colonial Stock Act, 1877, and on certain marketable securities under Section thirteen of the Finance Act, 1911, shall respectively be double the duties which would have been chargeable on these instruments immediately before the passing of this Act.

Motion made, and Question proposed, "That the Clause stand part of the Bill."

Sir F. BANBURY: I have not put an Amendment down to this Clause, but I wish to bring to the knowledge of the Chancellor of the Exchequer certain views which have been placed before me by some of my constituents as to the effect of this tax. The proposal is to double the present duty on all securities transferable by delivery and these duties are charged on the nominal amount. Every security for
£100 has to pay a certain duty quite irrespective of the security, and although there is no objection to the double duty in regard to anything near par the doubling of the duty on securities which stand at 20 or 30 on these low-priced securities is a more serious matter. Owing to a variety of circumstances there are a large number of low-priced securities quoted on the Stock Exchange. I am not sure whether this point has been brought to the attention of my right hon. Friend, and all I ask is that he will get up and give me an undertaking that he will consider this point before the Report stage is reached. I do not ask the right hon. Gentleman to make any alteration now, but I do want him to seriously consider the matter before the Report stage.

Mr. CHAMBERLAIN: I will certainly do that. I only regret that my right hon. Friend did not bring this matter to my notice by letter before we reached the Clause.

Sir F. BANBURY: The reason I have so many things to do, escaped my memory.

CLAUSE 36.—(Stamp duty on statements as to capital of companies, &c.)

(1) On and after the twentieth day of April, nineteen hundred and twenty, one pound shall be substituted for five shillings— 
(a) as the ad valorem Stamp Duty imposed by Sections One hundred and twelve and One hundred and thirteen of the principal Act, as extended by Section Twelve of the Finance Act, 1896, on statements as regards the capital of the companies referred to in those Sections; and
(b)as the ad valorem Stamp Duty payable under or by virtue of any private Act on any statements as regards the capital of any company; and
(c) as the ad valorem Stamp Duty imposed by Section Eleven of the Limited Partnerships Act, 1907, on statements with regard to the amounts contributed by limited partners to limited partnerships.

(2) In the case of a company registered or otherwise incorporated, or an increase of capital authorised, on or after the twentieth day of April, nineteen hundred and twenty, and before the passing of this Act, a supplementary statement of the nominal share capital of the company or of the amount of the increase so authorised, as the case may be, shall, within fifteen days after the commencement of this Act be delivered to the Commissioners of Inland Revenue duly
stamped with the additional duty of fifteen shillings for every one hundred pounds and any fraction of one hundred pounds over any multiple of one hundred pounds of the capital, or increase of capital, as the case may be.

If any supplementary statement required to be delivered under this Sub-section is not duly delivered in accordance with the requirements thereof, the duty chargeable on the statement, together with interest thereon at the rate of five per centum per annum from the date of the commencement of this Act, shall be recoverable from the company as a debt due to His Majesty.

Motion made, and Question proposed, "That the Clause stand part of the Bill."

Sir A. FELL: I cannot allow a Clause of this magnitude to pass without some protest being raised, or at any rate without the matter being mentioned, because it increases fourfold the Stamp Duty on statements as to capital of companies. The tax formerly was 5s. It is now proposed to make it £1 per centum. For a company with a capital of £100,000 the tax will in future amount to £1,000, whereas formerly it was only £250, and for a company of £500,000 the tax will be £5,000 on registration, as against £1,250. At the time of the initiation of companies it is most difficult to arrange for the capital before the company is advertised, and this additional tax will be a very serious incubus upon promotion. I believe the prosperity of this country in the last 50 years has largely arisen from the admirable nature of our company law, and the immense strides which English commerce and enterprise has made in the Colonies and throughout the world have largely depended on these companies. Our enterprises in the Argentine, in our Colonies, and in Canada are all based on companies which were started in London, and most moderate charges in those days were imposed by the Government. Now the Government are proposing to increase those charges fourfold, and the particular point I wish to lay before the Chancellor of the Exchequer is this, that in the initiatory stages before a company is floated as a new company—this does not concern so much companies which propose to increase their capital, as they have a large amount in hand, and can pay with the greatest ease—a new company which is being started to do business in foreign countries will find difficulty in meeting this additional
burden, as, before they can register or advertise the company, the promoters will have to arrange for this tax, and those who find the money, running as they do considerable risks, will naturally require very large return for the cash they put down. It is no use denying that if they are called upon to find, say £5,000, they will probably require a return of £20,000, with the result that the company will be saddled with heavy initiatory expenses before it can get to work. This will impose a great difficulty on that enterprise which has been so characteristic of the City of London in the past. I believe there could be nothing more harmful to the future of a company than that it should have a deadweight like this, which is not represented by any assets, thrown upon it. It means watering the capital, and it will involve a heavy drain on the company, because it is not allowable to deduct from the Income Tax returns the amounts which will have to be put aside to meet these heavy initiatory expenses. A great incubus is being put in this way on the enterprise of the future. I hope the Chancellor of the Exchequer will consider whether it is worth while, in view of the small additional revenue he will get, to enforce this difficulty in registering enterprises of this nature, and whether he will not thereby very largely defeat the progress of business in the City of London.

10.0 P.M.

Mr. HAILWO0D: I should like to support the contention of the last speaker. I am afraid the Chancellor of the Exchequer has been led away by the large flotations which have taken place in recent months. I fear he has been led into the belief that there is a big wave of prosperity in the matter of big flotations, and that it is a fit subject for extra taxation. I should like the right hon. Gentleman, if he possibly can, to discriminate between small private limited companies and the larger public companies that are being floated. In the first place it must be obvious to the Treasury that it is an advantage to have more limited liability companies than private concerns. Everyone knows that they are compelled to employ chartered accountants, and there is a great possibility that they pay up Income Tax better than private concerns. Therefore it must be in the best interests of the Treasury to limit the multiplication of
small private businesses. Another reason is that small private businesses are practically owned by the same people after they are converted into limited companies, with the exception that there is an inducement to distribute a few shares among the managers and foremen in the interests of the company or of the firm which does not obtain in private businesses. If we are to set anything against the cry of capitalism on the one side and labour on the other, we should try to get as many capitalists as possible. Limited liability company law enables shares to be spread among workpeople, and it may be hoped that, with the multiplication of limited liability companies, a greater number of workers in this country will own shares in various concerns. That would add to the stability of the country. It is undoubtedly a hardship that a concern with a capital of £10,000 or £15,000 or £25,000 should be asked to a £1 per cent. ad valorem duty because it is being converted into a limited liability company. I beg the Chancellor of the Exchequer to exercise some discrimination in this taxation. I believe it would be in the interests of the Treasury if he could discriminate between small limited liability companies and larger public concerns.

Sir WILLIAM BULL: I desire to give the Chancellor of the Exchequer a note of warning on the question whether he will not drive a large number of our companies away from registration in England. I do not know whether he remembers that that occurred in New York some 30 or 40 years ago. Taxation in connection with companies was put on very heavily, and consequently all the business of company registration went to New Jersey. It became the common practice for lawyers in New York to register companies in New Jersey rather than in New York. I do not know whether it would be possible, but it seems to me that the Treasury ought to consider whether lawyers and company promoters in the City of London might not deem it advisable to register companies in the Channel Islands at a lower rate than in London, with the consequent effect of a great loss to the Treasury. The Treasury probably have considered the matter, but I should like to put out that note of warning.

Mr. CHAMBERLAIN: What my right hon. Friend has said is, no doubt, true, that, in every proposal for a new tax or for an increased tax, you must be careful not to put the tax so high as to defeat your object. I confess, however, that I am less doubtful than I ever have been since I have had occasion to think about such things, about the future of the City of London. Experience of recent years makes me feel that the City of London can, and will, hold its own for all the great financial and business purposes for which it is famed. It has always been possible, not merely to avoid our existing taxes, but to avoid the provisions of our company law, by registering, not, indeed, in New Jersey, but in the Channel Island of Guernsey. But my right hon. Friend would not himself be attracted to an investment in a company registered in Guernsey. I think the advantages which are given by the City of London to honest enterprise make it unlikely that, for so small a charge as this, business would be removed from the City. My hon. Friend the Member for Yarmouth (Sir A. Fell) talked gloomily of the duty being raised four times. It is very small at present, namely, five shillings, and we are constantly told that about fifteen shillings is to-day the equivalent of the previous value of five shillings. If that is true every time the Government pays it out, it must be true every time the Government takes it in, and I think my hon. Friend's fears are exaggerated. I put forward these proposals in opening the Budget. They were explained more at length in the White Paper. I have had one representation officially from the Stock Exchange. If they shared the gloomy anticipations of my hon. Friend, I think they would have presented further arguments to me.
The only other point I have to meet is that put by my hon. Friend (Mr. Hail wood), who asked for differentiation between small private limited companies and public companies. I do not think such a limitation is possible or that I can justify it. My hon. Friend has argued that the result of transforming a partnership into a limited company will be that the accounts will be better kept and that the Exchequer will receive more revenue. It is no good struggling against the obvious force of events. I do not altogether
welcome the change of private partnerships into limited companies, which I think is largely inevitable, but does it always insure to the benefit of the Treasury? In a private company the profits are charged not merely to Income Tax but to Super-tax, according to the share of each partner in the profits and the means of the partner, and on whether it is distributed or retained in the business. The moment you make it a company, whatever is retained in the business is not charged, so that it is not such a simple proposition as my hon. Friend suggests. Quite apart from that, I do not think it is my business to encourage a change from partnerships into limited companies, not that it would be possible for me to justify such a distinction as he suggests between companies formed under private partnership below a certain level of capital, and all other partnerships so formed and public companies outside the scope which he particularly has in view. As far as I know, I have dealt with the various points raised according to my ability, whether to the satisfaction of those who put them to me or not I must leave them to say.

Major NALL: I do not think the right hon. Gentleman has really quite answered the point put by my hon. Friend (Mr. Hailwood). It is a real obstacle in the way of reconstructing very small concerns on a profit-sharing basis that the Stamp Duty should be increased in this manner. There is a tendency in these days to reconstruct many small concerns on a profit-sharing basis. That, I think, it is generally agreed is a desirable end. It is most unfortunate that this Bill should contain two particular points which are really very much against companies. It would be obviously out of order to discuss one which sets out a new tax on a limited company and leaves a private partnership free from that particular tax, but here is a case where a small limited company will be penalised. It is all very well for a new concern floated in the City to have in mind that these charges will have to be met out of the capital which has been subscribed. It is an entirely different matter when small trading concerns are reconstructed on a profit-sharing basis or for the enlargement of the business or
comparatively small partnerships converted into limited companies. It is entirely against the best interests of that sort of thing if a tax of this sort is to be imposed. I very much regret this tendency to add still further burdens on small corporate bodies which do not affect private partnerships, although they may be liable to certain taxation. If this proposal is to stand I hope we shall not year after year have further increases, because it is a very real burden on many people who probably do not make as much noise about it as the City would if they were really affected, but who nevertheless will feel a burden of this sort to be rather unfair in the present state of business in this country.

Sir F. BANBURY: These firms who turn their businesses into private limited companies are stated by the hon. Member to do so in order to have profit-sharing with their employés. Supposing that is the principal reason, what is to prevent a partnership, say, between the hon. Member and myself, deciding that a certain percentage of the profits should go to the employés? That could be done just as well under a private partnership as under a limited liability company. There are many reasons why the statement of the Chancellor of the Exchequer should be supported. I do not think it is at all a good thing that these small people should turn themselves into limited liability companies. One of the chief reasons is that they limit their liabilities in regard to their creditors. I think that is much more the reason than a desire to share profits with their employés. Speaking as a Member of the Treasury Issues Committee, I support what the Chancellor of the Exchequer has said. Moreover, by turning yourself into a limited liability company you lose your vote. I do not think that is a good thing that people who have a stake in the country should consider it to their advantage to deprive themselves of the right of the vote. I trust the Committee will strongly support the Chancellor of the Exchequer.

CLAUSE 37.—(Stamp duty on accident and indemnity policies.)

(1) The Stamp Duty chargeable under the heading "POLICY OF INSURANCE AGAINST ACCIDENT and POLICY of insurance for any payment agreed to be made during the sick-
ness of any person or his incapacity from personal injury or by way of indemnity against loss or damage of or to any property" in the First Schedule to the principal Act shall be sixpence instead of one penny.

(2) The rate of Stamp Duty payable by way of composition in respect of the Stamp Duty on any such policies as aforesaid under Section one hundred and sixteen of the principal Act as amended by Section thirteen of the Finance Act, 1896, and Sub-section (2) of Section eight of the Finance Act, 1907, or payable by way of composition under or by virtue of any private or other Acts, shall, in the case of accounts required to be delivered within twenty days after the tenth day of October, nineteen hundred and twenty, be thirteen pounds per centum, and in the case of all subsequent accounts be twenty-five pounds per centum instead of five pounds per centum.

(3) The word "sixpence" shall be substituted for the words "one penny" in Sections ninety-eight, ninety-nine, and one hundred and sixteen of the principal Act.

Sir G. YOUNGER: I beg to move to leave out Sub-section (2).
I have reason to believe the Chancellor of the Exchequer will accept the Amendment. Therefore I do not propose to detain the Committee with any lengthy explanation. I ought to say, however, that this Amendment applies to that class of insurance, such as railway ticket insurance, the risk upon each contract lasting for only a very limited period, and, therefore, placing the contract in a wholly different position from those policies which may run over a course of years. Some exception should, no doubt, have been made in these cases, and I am glad to think that the Chancellor realises this, and proposes to exempt them from the new duty.

Mr. CHAMBERLAIN: The proposal contained in this Sub-section, I understand, would be inequitable and unjustifiable, and I am prepared to accept the Amendment.

Amendment agreed to.

Clause, as amended, ordered to stand part of the Bill.

CLAUSE 38.—(Stamp Duty on Policies of Sea Insurance.)

For the Stamp Duties chargeable under paragraph (2) of the heading "POLICY OF SEA INSURANCE" in the First Schedule to the principal Act there shall be substituted the
duties at the following rates, that is to say:— 
(a) For or upon any voyage— where the sum insured— does not exceed £250–3d.; exceeds £250 but does not exceed £500–6d.; exceeds £500 but, does not exceed £750–9d.; exceeds £750 but does not exceed £1,000–1s.; exceeds £1,000, for every £500 and any fractional part of £500–6d.
(b) For time—
where the insurance is made for any time not exceeding six months, an amount equal to three times the amount which would be payable if the insurance were made upon a voyage; 
where the insurance is made for any time exceeding six months and not exceeding twelve months, six times the amount which would be payable if the insurance were made upon a voyage.

Motion made, and Question proposed, "That the Clause stand part of the Bill."

Lieut.-Commander KENWORTHY: I want to protest against the taxation of sea insurance policies. The money that this increased duty will put on shipowners may not be very great, but the aggregate extra tax on the shipping of the country is £75,000 this year and in a full year it will be £150,000. This applies not only to the large liner but to the humble tramp steamer and the small trawler. It is true that shipowners have made great fortunes during the War, but when one talks of British shipping having profited so much it must be remembered that neutral shipowners did very much better. They were not taxed to the same extent and they constitute now a serious rival to British shipping. I hope that the Chancellor of the Exchequer will give the same assurance with regard to this tax that he gave with regard to the tax on capital issues, that this is high water mark and that no greater tax will be proposed in future years.

Mr. CHAMBERLAIN: I cannot foretell what will be the action of Governments in future years.

Lieut.-Commander KENWORTHY: You did just now.

Mr. CHAMBERLAIN: I am prepared to say exactly the same thing that I said just now.

Clause 39 (Interpretation and Commencement, 54 & 55 Vict. c. 39), ordered to stand part of the Bill.

CLAUSE 40.—(Continuance and increase of rate of Excess Profits Duty. 5 & 6 Geo. 5, c. 89.)

Mr. CHAMBERLAIN: I beg to move "That the Clause be postponed."
In order to meet the general convenience of the Committee, it is proposed to have the Debate on the Excess Profits Duty and the Corporation Profits Tax on Monday, and then finish, so that we may go on with the Land Duties on Tuesday.

Sir D. MACLEAN: The Chancellor of the Exchequer has suggested what I think will be for the convenience of the Members, that the Excess Profits Duty be taken on Monday and then, on the assumption that that would take the whole day, we start the succeeding Clauses, beginning with Clause 49, on Tuesday.

Sir A. FELL: The Corporation Profits Tax will follow the Excess Profits Duty?

Sir D. MACLEAN: It will follow the Excess Profits Duty on Monday. If by any chance the Excess Profits Duty and the Corporation Profits Tax finish before 11 o'clock on Monday, then I understand that the Government will take what they can of the Orders on the Paper, up to 11 o'clock.

Mr. CHAMBERLAIN: That is so, if we can finish. I understand, having made inquiries through the usual channels, that this will suit the convenience of the Committee. Nobody wants to begin the discussion on the Excess Profits Duty at this time of night, and the Corporation Profits Tax cannot easily be discussed except in connection with and after the Excess Profits Duty. Accordingly I propose to postpone those until Monday. We hope that they will be finished on Monday. Assuming that they are finished on Monday, we will go no further on that day, and will then take the Clauses dealing with the repeal of the Land Values Duties first thing on Tuesday, and finish the Committee stage of the Bill on Tuesday, if that is agreeable, as I understand it is.

Sir D. MACLEAN: An effort will be made to finish on Tuesday, as far as I am concerned, and I do not see why it may not be so, but there is no sort of pledge on the part of Members of the Committee who sit on this side of the Committee. We shall observe any bar-
gain we make, not only in the letter but in the spirit, as my right hon. Friend knows. Of course, he will be delighted if he can finish it on Tuesday. As far as I can see, he has a very good chance of doing so.

Mr. CHAMBERLAIN: I certainly think we ought to do so. I take the right hon. Gentleman's offer, or suggestion, as he makes it; that is, that he and his friends will do their best, that they do not pledge themselves, but will co-operate towards that end; and he will understand that the Government are free to fix any time to secure that result. I cannot undertake, certainly not here and now, that another day shall be given to the Committee stage of the Bill. On the basis of what I have outlined, I propose to move that consideration be postponed of the Clauses relating to Excess Profits Duty, the Corporation Profits Tax, and the Land Values Duties, and when I can I must move the postponement of new Clauses and clear up the other Clauses and take the Schedule.

Sir D. MACLEAN: We on this side attach considerable importance to one of the new Clauses raising the whole question of Imperial Preference, which, by arrangement with the Chairman of Ways and Means, it was thought to be more convenient to discuss on the new Clauses than on the Clause in the Bill.

Mr. NEIL MACLEAN: Do I understand the right hon. Gentleman to mean that in the event of a long discussion taking place, owing to the interest taken in the Corporation Profits Tax, the Committee will sit after 11 o'clock on Monday.

Mr. CHAMBERLAIN: I think it is probable that we shall have to sit after 11 o'clock both on Monday and Tuesday. I have never known a Finance Bill conducted, as far as we have gone, without the Committee being asked to sit after the fixed hour, whatever it was.

Mr. N. MACLEAN: That is why I asked. I do not wish these two important matters to be confined merely to a seven hours' Debate.

Colonel GRETTON: I wish to protest against any intention, expressed or designed, that the Corporation Profits
Tax should be taken at a very late hour. It is a new tax which raises a new principle, and it wants very careful examination before the Committee agree to it. I have not the least idea how long the Excess Profits Duty Debate will last, but I wish to enter a strong protest against any arrangement which would compel the Committee to debate the Corporation Profits Tax after 9 or 10 o'clock at night, when a great many people will not be able thoroughly to examine the proposal. It is a matter of great importance to this country.

Sir F. HALL: I hope that the Chancellor will not bring on the subject of the Corporation Tax in the small hours of the morning, when very few Members are present. It is a most important innovation, and ought to be discussed at a reasonable hour.

Mr. CHAMBERLAIN: I would appeal to hon. Members to realise what are the difficulties of the Government, and how we are trying to meet them. I have had representations from all quarters that they did not wish to enter upon a very important discussion on the Excess Profits Duty at the fag-end of the sitting. I have been trying to arrange that and it is not very easy. I am met then by hon. Gentlemen opposite who say they also want something put first, and other hon. Members say there is yet another thing which must have first place or ought to come on very early. It is really impossible to make places of that kind. We have done our best to meet the convenience of the House, but at this time of the Session, if hon. Gentlemen want holidays, they really must be prepared to take some business, even though it is important, late at night and to sit long enough to do it. I hope that the Committee will recognise the real effort which the Government have made to meet the general convenience of Members and will fall in with the arrangement.

Major NALL: I hope that the Chancellor will not think that the protest made by some hon. Members against sitting at night really represents the feeling of a great many Members who have to travel up to town for their Parliamentary duties. For my part, and I know it is the feeling
of others, I shall be only too glad to assist in carrying out the programme which is outlined. It matters not at what hour we enter on the business so long as we know it is going to take place. If I know that any particular Clause is to be discussed at midnight or any other hour, then I am quite prepared to be here, and I am sure others are also.

Clauses 41 to 49 (inclusive) postponed.

CLAUSE 50.—(Reduction of Debt.)

(1) Any amount applied out of revenue during the current financial year in purchasing, redeeming, or paying off any description of debt shall be deemed to be expenditure within the meaning of Sections four and five of the Sinking Fund Act, 1875.

(2) Any sums issued out of the Consolidated Fund for the purpose of the depreciation fund under Section thirty-two of the Finance Act, 1917, and any sums so issued to the Commissioners of Inland Revenue in respect of any securities transferred to those Commissioners by way of payment for Death Duties or Excess Profits Duty, and any sums so issued to the National Debt Commissioners for the purpose of the purchase by those Commissioners of four pounds per cent. Victory Bonds or four pounds per cent. Funding Loan, 1960–90, shall for the purposes of this Section be deemed to be sums applied in purchasing, redeeming, or paying off debt.

Motion made, and Question proposed, "That the Clause stand part of the Bill."

Major BARNES: For the benefit of young members of the Committee, perhaps the right hon. Gentleman would explain what is the necessity for this Clause?

Lieut. - Commander KENWORTHY: Already in the passage of this Budget the Chancellor of the Exchequer has given up certain sources of revenue, and I am rather expecting that on Monday we shall hear of other concessions being given, which will also reduce the amount of revenue. At the same time, the expenditure has been increased in certain very important directions. In the Financial Statement for 1920–21 the balance available for Debt reduction is given as £234,198,000, but, owing to the concessions made, we know that that amount cannot possibly be available. I would therefore like to ask the Chancellor of the Exchequer, before we go any further,
if he will give a rough approximation of what will be the reduction of that estimated sum of £234,000,000?

Mr. CHAMBERLAIN: The most convenient plan, I think, would be that which is usually adopted, that, when we have reached the Third Reading stage, I should give the House some indication of the general effect of the changes we have made. I could not give any useful information now. As regards the question put as to the general purpose of the Clause, it is to enable us to employ the surplus of the year in the reduction of debt during the year, without waiting for it to fall into the Sinking Fund at the end of the year, as we should otherwise have to do.

Captain W. BENN: I understand this is the ordinary habit of devoting any amount raised in taxation in excess of the needs of the Departments to the Sinking Fund. There are two or three cases that have arisen this year, and one is the case of the new Ministry of Mines, which is to be constituted from parts of other Departments which have been gathered together under the new Minister. Those Departments have already presented Estimates for this year for a certain amount, and presumably the Minister of Mines will have Estimates for his new Department. Under this Clause, are we to understand that the surplus created in that way in these Departments is going to be devoted to the Sinking Fund, or shall we have new Estimates presented, and the Minister of Mines standing here and explaining the expenditure of his Department?

Mr. CHAMBERLAIN: The surplus of the year forms the old sinking fund, but this year we do not want to wait till the year is closed, with so large a surplus as we are contemplating; we want to apply it during the course of the year as it accrues, and that is the whole purpose of this Clause. My hon. and gallant Friend asks whether the savings on particular votes by reason of the transfer of a charge to other votes will fall into the surplus. If it is a net saving, yes; if it is a mere transfer, obviously it would not increase the surplus, but whatever surplus there is we are given power to apply under this Section not merely after, but during the year.

Captain BENN: I am very much obliged to the right hon. Gentleman for
his explanation, but what practice is he going to pursue in relation to these particular Estimates? Are these Departments going to surrender the surplus?

The CHAIRMAN (Mr. Whitley): That point has nothing to do with the Clause. It is a proper subject for an inquiry of the Financial Secretary to the Treasury at Question Time.

Clauses 51 (Charge for road improvement grant), 52 (Amendment of s. 12 of 61 & 62 Vict. c. 10), and 53 (Construction, short title, and repeal), ordered to stand part of the Bill.

Ordered, "That the postponed Clauses and the New Clauses be postponed until after consideration of the Schedules and any New Schedule."—[Mr. Chamberlain.]

First Schedule agreed to.

Orders of the Day — SECOND SCHEDULE.

DUTIES ON MECHANICALLY PROPELLED VEHICLES.


Description of Vehicle.
Rate of Duty.


1. Cycles (including motor scooters) not exceeding 8 cwt. in weight unladen:—



Bicycles—



Not exceeding 200 lbs. in weight unladen
£1
10s.


Exceeding 200 lbs. in weight unladen
£3



Bicycles if used for drawing a trailer or side-car, and tricycles
£4



2. Vehicles not exceeding 5 cwt. in weight unladen adapted and used for invalids

5s.

4. Vehicles of the following descriptions used in the course of trade otherwise than for the conveyance of goods and in agriculture (that is to say):—


Locomotive ploughing engines, tractors, agricultural tractors, and other agricultural engines, not being engines or tractors used for hauling on roads any objects except their own necessary gear, threshing appliances, farming implements, or supplies of fuel or water
5s.


Road locomotives and agricultural engines, other than such engines in respect of which a duty of 5s. is chargeable or which are used for haulage solely in connection with agriculture—



Not exceeding 8 tons in weight unladen
£25


Exceeding 8 tons but not exceeding 12 tons in weight unladen Exceeding 12 tons in weight unladen
£30


Tractors, agricultural tractors, and agricultural engines, other than such tractors or engines in respect of which a duty of 5s. is chargeable, used for haulage solely in connection with agriculture—


Not exceeding 5 tons in weight unladen
£6


Exceeding 5 tons in weight unladen
£10


Tractors of any other description
£21


5. Vehicles (including tricycles weighing more than 8 cwt. unladen) constructed or adapted for use and used solely for the conveyance of goods in the course of trade—


Not exceeding 12 cwt. in weight unladen
£10


Exceeding 12 cwt. but not exceeding 1 ton in weight unladen
£16


Exceeding 1 ton but not exceeding 2 tons in weight unladen
£21


Exceeding 2 tons but not exceeding 3 tons in weight unladen
£25


Exceeding 3 tons but not exceeding 4 tons in weight unladen
£28


Exceeding 4 tons in weight unladen
£30


With an additional duty, in any case if used for drawing a trailer, of
£2


6. Any vehicles other than those charged with duty under the foregoing provisions of this Schedule:—


Not exceeding 6 horse-power or electrically propelled
£6


Exceeding 6 horse-power
£1 for each unit or part of a unit of horse-power.


In the case of a vehicle the engines of which are prayed to the satisfaction of the authority charged with levying the duty to have been constructed before the first day of January, nineteen hundred and thirteen, a rebate shall be allowed from the duty chargeable under this paragraph equal to twenty-five per cent. of the amount thereof.

The PARLIAMENTARY SECRETARY to the MINISTRY of TRANSPORT (Mr. Neal): I beg to move, in paragraph 1, after the word "scooters", to insert the words "and cycles with an attachment for propelling the same by mechanical power".
The question has been raised whether the addition of an attachment for propelling cycles by mechanical power will remove this class of vehicle from the bicycle which is subject to a lower rate of taxation, and include it among the tricycle, which is subject to a slightly higher rate of taxation. In order to secure that they are treated as bicycles and not as tricycles, I move this Amendment.

Captain ELLIOT: Is there any dictionary or other standard work in which this word "scooter" is to be found? It is a very important thing. It is a new word in an Act of Parliament.

Mr. A. M. SAMUEL: I think it is rather a shame that we should have a word like this imported into the English language. We ought to make some effort to find a standard word to preserve the purity of our English. This is a word which ought not to be allowed to stand.

Lieut.-Commander KENWORTHY: I think the words chosen by the Parliamentary Secretary to the Ministry of Transport are extremely misleading, and I have known something about bicycles for a good many years

Amendment agreed to.

Lieut.-Commander KENWORTHY: I beg to move, in paragraph 1, to leave out "£1 10s." and to insert instead thereof "15s."
This tax of 30s. on motor-bicycles is very heavy. After all, the motor-bicycle is not a rich man's means of conveyance. They are used generally by young mechanics and people of that sort, and I think the Amendment is very much needed. I do not know what will be brought in by this increased duty, but I do not think the Exchequer would lose tremendously by this concession, which I hope the Chancellor of the Exchequer will make to a class of men, most of whom, I think, have served in the Army and have now been discharged, and a great many of
whom use their motor-bicycles partly in their business.

Mr. A. M. SAMUEL: I should like to appeal on behalf of another class, to whom my hon. and gallant Friend has not referred—I mean the wounded and paralysed, who use attachments on bath chairs. I hope the Chancellor of the Exchequer will make some exception in their case.

Mr. NEAL: This Amendment, which stands on the Paper in the name of another hon. and gallant Member (Colonel Newman), is followed by two others in a similar class, to reduce the Schedule rates by one-half. I would point out that these fees include registration fees, and the fact has to be borne in mind that motor-cyclists previously paid on their petrol The history of the particular figure is this: When it was a question of arranging what should be the proper duty, the Auto-Cycle Union and the Motor and Motor Cycle Traders and Manufacturers' Union were consulted as to what they thought would be an appropriate duty, and they recommended, with reference to the item which is now under discussion, the figure which has been inserted, namely, 30s. In reference to the other two, we have adopted their recommendations with a very trivial exception—I think 5s. in one case. This, therefore, has been approved by those immediately concerned, both the users and makers of motor cycles.

Lieut. - Commander KENWORTHY: I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Lieut. - Commander KENWORTHY: I beg to move, in paragraph 1, to leave out "£4" ["Bicycles if used for drawing a trailer or side-car and tricycles, £4"] and to insert instead thereof "£2."
A person who has a trailer is no better oft than a person with a motor-cycle without a trailer. It means that he is probably married, and therefore a good deal worse of. This is a special tax on married men who generally use their trailers to take their wives and children out. The whole trend of legislation has been to give relief to men with families, but in this case you are putting an extra tax on them.

Dr. MURRAY: I desire to support the Amendment. I think a motor cycle, without a trailer or side-car, is the most
selfish thing in existence. In order to encourage people to have a companion on their country rambles, I think the Amendment should be accepted. When I see a man going along alone in one of the country lanes, I invariably think he could or should spend a pound or two or more on a side-car or trailer. It would give a lot of pleasure to someone else. "You would not," is what occurs to me, "leave your wife as you are doing, at any rate you will double the pleasure of someone." In order to promote and increase pleasure, and get a larger number of people into the country lanes to get the fresh air, and away from London, I support this. No doubt the hon. Gentleman opposite will be in sympathy with these ideas and accept the Amendment.

Mr. NEAL: The same observations that I made before are applicable to this Amendment as to our acceptance of the suggestions of the trade.

Amendment negatived.

Mr. NEAL: I beg to move, in paragraph 2, after the word "Vehicles" ["Vehicles not exceeding 5 cwt."], to insert the words "including cycles with an attachment for propelling the same by mechanical power."
Earlier the hon. Member for Govan (Mr. N. Maclean) raised precisely the same question as mentioned by my hon. Friend the right hon. Member for Norwich (Mr. G. Roberts). The Amendment is to make the position quite clear.

Amendment agreed to.

Mr. NEAL: I beg to move, in paragraph 3, after the word "carriages" ["Vehicles being hackney carriages"], to insert the words "as defined in Section four of the Customs and Inland Revenue Act, 1888."
There is a variety of definitions of carriages, and of hackney carriages. In order to make it quite clear, we propose the definition which is the one given in the Act quoted.

Amendment agreed to.

Mr. NEAL: I beg to move, in paragraph 3, to leave out "5" ["seating not more than 5"], and to insert instead thereof "6."
This deals with vehicles of the hackney carriage class, and it is provided that
vehicles seating more than 5 persons shall pay the duty set out. The hon. Member for Nottingham (Mr. Atkey) has an Amendment down to insert "7," but the proposal I am making will meet his point, because it is not made clear in the Schedule whether the number includes the driver or not. By a later Amendment w make it clear that the driver is not included, and the hackney carriage may carry 7 persons including the driver.

Amendment agreed to.

Further Amendments made: In paragraph 3, leave out "5" ["seating more than 5"], and insert "6".

At the end insert the words, "In this paragraph the number of persons mentioned does not include the driver of the vehicle."

In paragraph 4, after the word "used" ["Vehicles of the following descriptions used"], insert the word "solely."

Leave out the words "otherwise than for the conveyance of goods and" and insert instead thereof the word "or."—[Mr. Neal.]

Mr. NEAL: I beg to move, in paragraph 4 after the word "water" ["supplies of fuel or water"], to insert the words "required for the purposes of the vehicle or for agricultural purposes."

Lieut.-Commander KENWORTHY: It seems extraordinary to propose this. Why should these machines pay more than other machinery? It is part of the policy of taxing every single thing in the country; and I wish to enter a short protest.

Mr. NEAL: It is only 5s., which is practically a registration fee.

Lieut. - Commander KENWORTHY: Yes, but why?

Amendment agreed to.

Mr. NEAL: I beg to move, in paragraph 5, after the word "trade" ["in the course of trade"], to insert the words "being vehicles which are electrically propelled, and which do not exceed 25 cwt. in weight unladen—26."
The object is to reduce the scheduled duty of £10 to a lower duty of £6, and this is to redeem a promise made by the Minister of Transport in the Debate on the Budget Resolution, when his attention was called to the fact that there
has grown up a smaller vehicle, such as the little electrical carriages which run about railway platforms, on which a duty of £10 is excessive. It is, therefore, proposed to reduce it to £6.

Amendment agreed to.

Mr. NEAL: I beg to move, in paragraph 6, to leave out the words "In the case of a vehicle the engines of which are proved," and to insert instead thereof the words, "If any person proves."
This and several subsequent Amendments stand together. If hon. Members look at this paragraph, they will see there is an allowance of 25 per cent. of the total due in respect of vehicles the engines of which are proved to the satisfaction of the authority charged with levying the duty to have been constructed before the 1st January, 1913. I propose to leave out the words "In the case of a vehicle the engines of which are proved," and then will follow other Amendments providing for the rebate on the production of a certificate that the full duty has been paid.

The CHAIRMAN: The Department appears to have been very slack. I presume the hon. Gentleman will not move the next Amendment to substitute "vehicles" for "a vehicle," seeing that that contradicts the one he is now moving. The two cannot stand together. I must take the first one, and the other must be done on Report.

Amendment agreed to.

11.0 P.M.

Further Amendment made: In paragraph 6, leave out the words "to have been" ["to have been constructed before the first day of January"], and insert instead thereof the words, "that he has paid in respect of any vehicle the duty chargeable under this paragraph, and that the engine of the vehicle was".—[Mr. Neal.]

Mr. NEAL: I beg to move, in paragraph 6, to leave out the words, "a rebate shall be allowed from the duty chargeable under this paragraph equal to twenty-five per cent. of the amount thereof," and to insert instead thereof the words, " he shall be entitled to repayment of twenty-five per cent. of the duty paid."

Question, "That the words proposed to be left out stand part of the Schedule," put, and negatived.

Question proposed, "That the words he shall be entitled to repayment of twenty-five per cent. of the duty paid be there inserted."

Colonel GRETTON: Before these words be inserted, which ostensibly give a rebate of 25 per cent. to the taxpayer, I should like to hear some explanation as to how the taxpayer is to claim this rebate. In what way can he prove the date of the engine? Most engines are stamped with the maker's number, but in many cases the makers have ceased to make the engines. Has the Ministry of Transport any process by which this rebate may really become effective, and by which the taxpayer, without an unduly laborious process, may be able to obtain the rebate?

Mr. NEAL: That has been considered. There are a variety of ways in which the proof may be given. It may be that a particular motor has been continuously registered from January, 1913, and in that case the proof would be conclusive. In some cases the engines themselves bear dates, and in such cases there would be no difficulty. In other cases the taxpayer must adopt the most appropriate means of proving the date.

Colonel GRETTON: That is just my point. What is the most appropriate means? It is no use putting up a rebate which is really delusive and cannot be obtained. As I expected, my hon. Friend, when he comes to the point, is quite vague and does not suggest how this proof may be obtained. If the offer is inserted in the Bill, it should be a genuine, substantial offer, and it should be certain that the taxpayer will really be able to obtain the rebate.

Motion made, and Question proposed, "That the Schedule, as amended, be Second Schedule of the Bill."

Mr. HOGGE: I think that, before we agree to the Schedule, in view of the strictures which you, Mr. Whitley, have passed on the Ministry of Transport and their Amendments, the attention of the Chancellor of the Exchequer ought to be drawn to what you have said, and we ought to understand what it is that we have really agreed to. I think that, before the Schedule is definitely agreed to by the Committee, the Parliamentary Secretary to the Ministry of Transport should
now read out to us exactly what the change means, so that we can appreciate what has been the outcome of the efforts of himself and his Chief and the corresponding Directors-General.

The CHAIRMAN: I think the hon. Member is, perhaps, taking the matter a little too seriously. What the Ministry have done has been simply to put down a number of Amendments which are not all consistent with one another.

Captain ELLIOT: I should like again to call the attention of the Government to the fact that there is a word in this Bill of which they cannot give any definition. This is not simply a joke, although I see right hon. Gentlemen on the Front Bench scowling most disapprovingly. There has been too much of this. The Government put the word "profiteering" into an Act of Parliament without ever defining what "profiteering" was. Now they attempt to put in the word "scooters". It is one of the most dangerous things that can be imagined. It is all very well for them to change our laws and constitution, but to change the grammar of England is going rather far. There is nothing more important than understanding the very bones of the language. What are we to do if some future Government, some less educated Government if that were possible, begins to put in the ordinary slang of the streets? After all there is no great gap between that and this word. It may be that Governments in the past have been in the habit of inserting these disgusting neologisms in Acts of Parliament, but I certainly do not think so. I beg of older Members to give us their opinion on this point, because the Government that began last year with "profiteer" and goes on this year with "scooter" may go on next year to "jazz," or any such thing. If we cannot get any definition, I ask you, Sir, for a ruling, not only as Chairman of the Committee, but as Chairman of Ways and Means, your name appearing on the back of the Bill. The right hon. Gentleman (Mr. Asquith) in a very brilliant speech yesterday drew attention to this outburst of colloquialism in the Civil Service of the country, and I can only suggest the evil communication of the Minister of Transport, whose name also appears on the back of the Bill, has corrupted his manners in this case, and the colloquial habits of every
day are penetrating farther and farther into the arena of Government. Before the Schedule goes through I beg some Member of the Government to give us a definition of what he means by the word "scooter", and if some of them can I call for the presence of the Minister of Education. When they bring in these disgusting new forms of American slang and put them into Acts of Parliament it is worth while at least to call the attention of the House to the degradation of English, which is not only being connived at, but actively pressed forward by the Treasury Bench. Is it not possible for the Government to give us a definition of the word "scooter".

Dr. MURRAY: I wish to reinforce the leader of the neo-Bolshevists on the other side of the House. I do not know what language the word "scooter" belongs to. It seems to me to be very bad English.

Major NALL: I want to call attention to a point of substance. It appears from what the Parliamentary Secretary has said that the Ministry made rather a mistake in the Schedule as, it now stands. He said that, as the Schedule stood, the tax of £10 would be charged on small electrically-propelled trolleys, and he moved to fix the tax at £6. For the most part these trolleys never come upon any highway; they are used in railway stations, goods yards, and warehouses. Why is it proposed that these small trolleys, which make no use of a public highway, should pay a tax which is designed only for vehicles that use the highway. Surely the whole object of this schedule is to enforce payment for the use of the public highway, and yet the Ministry of Transport is now inflicting this most unnecessary tax on small vehicles, which make no use of the highway. This is a charge on railways that appears to be most unreasonable and a charge upon everybody who uses these small trolleys in factories and for other purposes. A great mistake has been made, and I hope it will be put right on Report.

Lieut.-Commander KENWORTHY: I reinforce what the hon. Member has said. I am very much in favour of encouraging labour-saving appliances in every possible way. These electrical luggage carriers are great labour savers
and a great convenience in handling traffic, and yet it is proposed to put a tax of £6 upon them, even if they are used inside warehouses. A tax is also put upon motor char-a-bancs, which are transforming the rural life in out-of-the-way districts. I do not think this very high tax is justified. There is also a ridiculous proposition to tax ploughs and other agricultural appliances. This will bring in no revenue. It is really only a registration fee, but it will entail an extra staff going round to inspect these agricultural implements and to call to see the licence. It means that we are getting money in one direction, and taxpayers will have to find the money in another.

Major GLYN: I should like to know what is meant by the words "and such other districts as the Minister of Transport may fix." There is a great distinction drawn between mechanical vehicles in the Metropolitan Police area and those in other districts. Those Members who represent rural constituencies realise how heavy is the rate that is now imposed for road maintenance in those districts. It is very hard on rural districts where these large char-a-bancs tear up the roads. They cannot afford to pay for the maintenance of the roads unless they get real assistance from those persons who derived benefit from the beautiful country through which those large vehicles ran.

Mr. A. M. SAMUEL: There is a danger in the wording of the Amendment as to electrically-propelled vehicles. In many of our factories we have lifts which are electrically propelled. Some over-zealous official might give a lot of trouble by interpreting the words as covering factory lifts, and I would press the Under-Secretary to say whether the words include a factory lift or not.

Mr. NEAL: The contribution made to the local authorities in no sense depends upon the amount collected in the district. It is intended that half the cost of the maintenance of the main roads shall be paid to the local authority who are responsible for those roads and one-fourth of the cost of the second-class roads. In reply to the hon. Member (Mr. Samuel), it is plain that a lift in a factory would not be a mechanically-propelled vehicle within the meaning of the Act.

THIRD SCHEDULE.


CONSEQUENTIAL AND MINOR AMENDMENTS OF INCOME TAX ACT, 1918.


Enactments to be amended.
Nature of Amendment.


Section 4 … … …
The words "two thousand pounds" shall be substituted for the words "two thousand five hundred pounds."


Section 5 … … …
For the words "estimated for the purposes of exemption "or abatement under this Act" there shall be substituted the words "required to be estimated in a return made in "connection with any claim for a deduction from assessable income."


Section 16 … … …
A reference to any allowance or deduction shall be substituted for the reference to any exemption, abatement or relief under the preceding provisions of Part III. of the Income Tax Act, 1918.


Section 17 … … …
The words "allowance or deduction" shall be substituted for the words "exemption, abatement."


Section 18 … … …
The words "the Income Tax Acts" shall be substituted for the words "any exemption, abatement, or relief under this Act."


Section 19 … … …
A reference to any claim for an allowance or deduction shall be substituted for the reference to the claim under the preceding provisions of Part III. of the Income Tax Act, 1918.


Section 20 … … …
A reference to any allowance or deduction shall be substituted for the reference to any exemption, abatement, or relief under the preceding provisions of Part III. of the Income Tax Act, 1918.


Section 22 … … …
A reference to any allowance or deduction shall be substituted for the references to any exemption, abatement, or relief which is dependent wholly or partially on total annual income.


Section 23 … … …
The words "allowance or deduction" shall be substituted for the words exemption, abatement, or relief."


Section 27 … … …
A reference to any allowance or deduction shall be substituted for the reference to any exemption, abatement, or relief under the preceding provisions of Part III. of the Income Tax Act, 1918.


Section 28 … … …
A reference to claims for any allowance or deduction shall be substituted for the reference to claims under the preceding provisions of Part III. of the Income Tax Act, 1918.


Section 29 … … …
The words "allowance or deduction" shall be substituted for "exemption, abatement."


Section 30 … … …
A reference to any allowance or deduction shall be substituted for the reference to any exemption, abatement, or relief there in before described in the Income Tax Act, 1918.


Section 32 … … …
In Sub-section (2) the word "annual" shall be omitted.



In paragraph (a) of Sub-section (3) the word "chargeable" shall be omitted.



Paragraph (b) of Sub-section (3) shall be omitted.



Sub-section (4) shall be omitted.


Section 39 … … …
The following shall be substituted for proviso (i) to paragraph (b) of Sub-section (3).



"Any such interest shall be chargeable under Case III. of Schedule D."


Section 105 … … …
In paragraph (b) of Sub-section (1) the words "one hundred and fifty pounds "shall be substituted for the words "the" sum for the time being fixed as the limit for total "exemption from tax."


Fifth Schedule … …
In paragraph XVII. a reference to any allowance or deduction shall be substituted for the reference to any exemption, abatement, relief, dependent on total income.


NOTE.—In this Schedule the expression "allowance or deduction" means any allowance, deduction, o reduction of rate made or allowed under sections fifteen to twenty-two, both inclusive, of this Act.

Amendments made: In paragraph beginning "Section 32," after the word "omitted" ["word 'chargeable' shall be omitted"], insert the words

"and the words the provisos of the Income


Section 236 … … …
The words "allowance or deduction" shall be substituted for the words "exemption, abatement."


First Schedule … …
In paragraph (5) of Rule 8 of No. V. in Schedule A the words "the Income Tax Acts which relate to claims for any allowance or deduction" shall be substituted for the words "this Act which relates to claims for exemption, abatement, or relief."

In paragraph beginning "Fifth Schedule," after the word "abatement," insert the word "or."—[Mr. Chamberlain.]

Motion made, and Question proposed, "That the schedule, as amended, be the Third Schedule of the Bill."

FOURTH SCHEDULE.


ENACTMENTS REPEALED.


Session and Chapter.
Short Title.
Extent of Repeal.


59 & 60 Vict. c. 36.
The Locomotives on Highways Act, 1896.
Section eight, as from the 1st day of January, 1921.


62 & 63 Vict. c. 9.
The Finance Act, 1899.
Section two.


10 Edw. 7. c. 8
The Finance (1909–10) Act, 1910.
Sections one of three; Sub-section (1) of Section four; in Sub-section (2) of Section four the words "for the purpose "of the assessment of duty thereon," and the words "and to pay interest at the "rate of five per cent. per annum on any "duty ultimately payable by him as from "the date on which the instrument has "been executed"; in Sub-section (3) of Section four the words from "(a) either "to "assessment or," and the words from "which in their opinion" to the end of the Sub-section; Sub-section (4) of Section four; in Sub-section (5) of Section four the words from "and with respect" to the end of the Sub-section; Sub-section (6) of Section four and in Sub-section (7) of Section four the words from "but the "Commissioners" to the end of the Subsection; Sections five to nineteen; in Subsection (4) of Section twenty-one the words from "or where" to "that duty," the words "or increment value duty as the "case may be," the words "or reduc"tion" and the words "or reduction as "the case may be"; Sections twenty-two, twenty-three, twenty-five to twenty-nine; Sub-section (4) of Section thirty-one; Section thirty-two; in Sub-section (1) of Section thirty-five the words from and "any increment" to the end of the Sub section; Sections thirty-six to forty; in Section forty-one the definitions of "rent-"charge," "rent," "incumbrance," "fixed

Tax Acts' shall be substituted for the words 'this Act'."

At the end of paragraph beginning "Section 105" insert the words

Sir D. MACLEAN: It may alleviate the anxiety of the hon. and gallant Gentleman, if I say that I have looked up the word " scooter," and find that it is quite a good English word.

Session and Chapter.
Short Title.
Extent of Repeal.




"charge," "owner" and "agriculture" in paragraph (1) of Section forty-two the definition of "rent," "rent-charge," "owner," "feeholder," and "incumbrance"; paragraph (3) of Section forty-two to "accordingly"; Section sixty-two; in Section seventy-three the words from "Provided that" to the end of the Section; and as from the 1st day of January, 1921, Sections eighty-four to eighty-six and the Fifth Schedule.


1 & 2 Geo. 5. c. 2.
The Revenue Act, 1911.
Sections one to six.


1 & 2 Geo. 5. c. 48.
The Finance Act, 1911.
Sections eleven and twelve as from 1st day of January, 1921.


2 & 3 Geo. 5. c. 8.
The Finance Act, 1912.
Section ten.


5 & 6 Geo. 5. c. 89.
The Finance (No.2) Act, 1915.
Sub-section (5) of Section twenty-one; Section forty-nine; and as from 1st day of January, 1921, Sections ten and fourteen.


6 & 7 Geo. 5. c. 24.
The Finance Act, 1916.
Sections thirteen and fourteen as from 1st day of January, 1921.


7 & 8 Geo. 5. c. 31.
The Finance Act, 1917.
Section nine as from the 1st day of January, 1921.


8 & 9 Geo. 5. c. 15.
The Finance Act, 1918.
Sections eighteen to twenty.


8 & 9 Geo. 5. c. 40.
The Income Tax Act, 1918.
Sections nine to thirteen; Sub-sections (1) and (2) of Section fourteen; Sections fifteen, twenty-one, twenty-four, twenty-six, thirty-one, forty-two to forty-four, fifty, fifty-two, and fifty-five.


9 & 10 Geo. 5. c. 32.
The Finance Act, 1919
Sections three to five, eleven, twenty, twenty-one, twenty-three, twenty-seven; and the First Schedule.

Amendments made: In paragraph beginning "10 Edw. 7 c. 8," leave out the words "from 'Provided that' to the end of the Section", and insert instead thereof the words "the conveyance or transfer of any stock or marketable security, as defined by Section one hundred and twenty-two of that Act or to."

Leave out the words "and as from the 1st day of January, 1921, Sections eighty-four to eighty-six, and the Fifth Schedule," and insert instead thereof the words
as from the 1st day of January, 1921, Section eighty-four; as from the 1st day of July, 1921, Section eighty-five; as from the 1st day of January, 1921, Section eighty-six; and as from the 1st day of July, 1921, the Fifth Schedule.

In paragraph beginning "1 & 2 Geo. 5, c. 48," leave out the words "Sections eleven and twelve as from 1st day of January, 1921," and insert instead thereof the words "as from the 1st day of January, 1921, Section eleven; and as from the 1st day of July, 1921, Section twelve."—[Mr. Chamberlain.]

Mr. CHAMBERLAIN: I beg to move, in the paragraph beginning" 5 & 6 Geo. 5, c. 89," to leave out the words "and as, from 1st day of January, 1921, Sections ten and fourteen," and to insert instead thereof the words, "as front the 1st day of January, 1921, Sub-sections (1) and (2) of Section ten; and as from the first day of July, 1921, Sub-section (3) of Section ten and Section fourteen."

Sir F. BANBURY: We are going on at an enormous rate. I venture to say that not a single hon. Member understands this Schedule, except the Government, and not all of them. The Schedule begins about the middle of page 41 and it goes on very nearly to the end of page 42. What on earth it all means nobody knows. We have all these Amendments proposed without a word of explanation of what we are doing. The Committee have been very patient, and I really think we ought to have some explanation. I do not think we ought to have had an Amendment like this put down at all.

Mr. CHAMBERLAIN: The object of the Amendment is to make the Schedule conformable to the Bill.

Captain W. BENN: We are going to move to omit the Clause which repeals the Land Duties. It appears to me that parts of this Schedule refer to the Land Duties. I do not want to object to the Chancellor of the Exchequer's Amendment as long as it is understood by the Chair that it will not prevent us debating fully the repeal of the Land Duties.

The CHAIRMAN: Most certainly. I will take care of that. I will not allow anything passed in the Schedule to prejudge that.

Amendment agreed to.

Mr. HOLMES: I beg to move, in the paragraph beginning "8 & 9 Geo. 5, c. 40," to leave out the words "to forty-four" ["thirty-one, forty-two to forty-four, fifty, fifty-two"].
It is unfortunate that at this late hour we should come to a matter which, though in itself it may look very innocuous, affects the interests of every Income Tax payer in the country. The Schedule mentions certain Sections of the Income Tax Act, 1918, to be repealed. Among them are Sections 43 and 44, two of the most important Sections which protect Income Tax payers against unduly high assessments.

Mr. CHAMBERLAIN: Will the hon. Gentleman allow me to explain? He was good enough to consult me a moment ago. He wants to preserve in being certain reliefs. The Amendment will have no such effect. The reliefs require to be renewed by statutory enactment each year. We have not renewed them this year. All you would leave would be an obsolete phrase on the Statute. The whole object of this repeal is to clear the Statute Book of something which has become obsolete.

Mr. HOLMES: I am aware of that, because I have had advice on the subject, and it was to the effect that if the Chancellor of the Exchequer or the Committee accepted this to-night we could on Report add to the Bill the Clause to which the Chancellor of the Exchequer has referred. We can settle the question one way or the other now, and then deal with it on Report if the Committee approve of this Amendment. Clause 43 enacts that an Income Tax payer, whether company or
firms, or private individual or salaried man, is assessed upon three years' average ending before the commencement of the year of assessment. For the current year of 1920–21 the company which makes up its books to 31st December last year would be assessed on the average of the years 1917, 1918 and 1919, but the taxpayer has the right at the end of the year of assessment to bring in the current year and, instead of the three years I have mentioned, to be assessed on the average of the years 1918–19–20, if the profit for the year of assessment does not exceed the three years' average on the new basis. This right was dropped for a short time, but was revived and continued up to the present time. The Chancellor has now taken away what is a most important right for every Income Tax payer. Section 44 is still more important. It applies only to individuals. If an individual can prove that his actual income in any year is ten per cent. less than the income on which he has been assessed on the three years' average, he can claim to be assessed on the actual income and to be repaid whatever sum he has overpaid on the original estimate. Without a word of explanation in the Budget Speech of the Chancellor, one of the most important rights of the Income Tax payer is taken away at the end of the Schedule and by not putting in the Clause. I appeal to the Committee that they should preserve the right of the individual and the business man to continue this privilege.

Sir F. BANBURY: I gathered from the Chancellor that these Clauses were obsolete. I do not think that Clause 43 is yet obsolete, though it may be in a year or two. What is the history of Clause 44? Somewhere about the years 1907–8 the right hon. Gentleman the Member for Paisley (Mr. Asquith), being then Chancellor of the Exchequer, moved to abolish the right which every Income Tax payer had had since, I think, the inception of the Income Tax Act, that if at the end of the year in which he had returned his income as being a certain sum he could prove to the satisfaction of the Commissioners that he had over-estimated that income, and that it was less than the return earlier in the year should be put right, he had the right to have that deficiency exempted from Income Tax.
Income Tax is a tax on income, and if you have not got that income the Government have no right to tax you on what you have not got. When the right hon. Gentleman the Member for Paisley, as Chancellor of the Exchequer, moved to repeal that right, I protested that it was against the spirit of the Income Tax Acts, but his only excuse was that up to then the majority of Income Tax payers were not aware that that Clause was in existence, and that it was causing some diminution off income to the Government. A lamer excuse I never heard, but at that time the party with which I had the honour to be connected was in a very small minority, and we got no satisfaction. After that, nearly every year I moved to reinstate that Clause, and finally, in about 1914 or 1915, I moved the Clause, and when, I think, Mr. McKenna was Chancellor of the Exchequer, he accepted it, with this modification, that where a person proved that in any given year his income was 10 per cent. lower than that estimated he might have that difference returned to him. I do not think that was just, because even then, if the income was 10 per cent. lower, the Chancellor reserved to himself the right to charge Income Tax upon a sum which had never been received.
Now the Chancellor of the Exchequer desires to repeal the whole thing again and to go back to the bad precedent which was instituted by the right hon. Member for Paisley, with the result that where a man finds that on the three years' average he has returned his income at £1,000 and, owing to bad trade, he has actually received in the year £200, still he has to pay tax on £1,000. That was very wrong when the Income Tax was 6d. or 1s., but how much more wrong is it when the tax is 5s. or Os.? I do not think the authorities, in their desire to extract the last farthing from the taxpayer, can have realised the act of injustice which they are going to inflict if this Clause is repealed, and I venture to say that, considering the great facilities which the Committee has given to the Government to-day, when they are going to do an important act like this, we ought either to be told the Government will accept the Amendment or that we should adjourn in order that the whole of the Committee may really know what is being done.

Mr. CHAMBERLAIN: I think both the hon. Members are conducting the Debate under some misapprehension of the actual facts. There are two Sections concerned. One is 43, which is a revival of an old practice of the Income Tax which had been abandoned. It was revived during the War as a special War measure. Section 45 of the Income Tax Act of 1818 reproduces Section 13 of the Act of 1914, which was enacted in the early days of the War to meet cases of exceptional hardship. That provision was itself a revival of Section 133 of the Income Tax Act of 1842 and of a Section in the Revenue Act of 1855. The whole Section came under review by a Departmental Committee on Income Tax appointed by me when I was Chancellor of the Exchequer before, and presided over by the late Lord Ritchie in 1905. That Committee, in their Report, pointed out that the operation of the Section was unfair to the revenue, since it enabled the taxpayer to obtain relief when profits were low without giving any corresponding power to the Crown to re-open the issue when, profits were high. As a result, the sections were then repealed, and they were never renewed until 1914 and then only as a special war provision. Section 44 of the Act of 1918 reproduces Section 39 of the Act of 1918, which was the time when Mr. McKenna accepted the Amendment to which my right hon. Friend (Sir F. Banbury) referred. It does not provide for a return of Income Tax paid on incomes never received. It provides that where a man's actual income for the year is less than the sum at which he is assessed on the three years' average he may abandon the three years' average and have the benefit of the lower rate of that year. That, again, was introduced purely as a war concession to meet the special hardships that arose in consequence of the outbreak of the War. It was never intended that these or other special war reliefs should be continued beyond the period of the War. If the hon. Gentleman presses the Amendment, I will leave it, but it has no effect. They are words without effect. If he tries to render them effective by a Clause on Report, I must say that I shall not be able to accept that Clause.

Mr. HOLMES: The Chancellor of the Exchequer is trying to ride on two horses. His argument, in his Budget
speech with regard to the continuance of the Excess Profits Duty, was that the War was still proceeding and that we were still under war conditions, but, with regard to Income Tax, he says that the War is over and that he cannot any longer continue these concessions which were intended for people who were suffering during the War. His argument with regard to the Excess Profits Duty, however, applies equally to the Income Tax. If a man this year suffers a diminution in income owing to a fall in prices, it is just as much due to the War as if another man makes greater profits owing to a shortage of goods and increased prices. There is no ground for withdrawing this because the War is over. That is no sound argument at all. It is perfectly true that Section 43 has a provision in it that if a person
has suffered a diminution of profits or gains due to circumstances attributable directly or indirectly to the present War.
Section 44 does not mention "the present War". There is nothing whatever with regard to the War in the original 1916 Act. This was put back as the result of the right hon. Baronet's Motion in 1916, and has no relationship to the War. It was only right if a man's income fell that he should pay on the actual income, and not on a statutory income, which he was not receiving at the period, and I hope the Committee will show it is in favour of the Section being kept in the Bill, and on Report we can put a proper Clause down.

Mr. CHAMBERLAIN: Of course, the hon. Gentleman's attitude makes it necessary to oppose the Amendment. I cannot accept the Amendment on any such understanding, and we must take a Division.

Sir F. BANBURY: I would suggest that it would be far better to accept the proposal of the Chancellor of the Exchequer, and see what happens on the Report stage. We do not want to extract any pledge from him on the understanding that he will take the words out, and on the Report stage it will be open to him to make any suggestions he likes. I hope the hon. gentleman will accept that.

Mr. HOLMES: I am quite willing to accept the right hon. Baronet's suggestion, and I hope the Chancellor of the Exchequer will give us an opportunity on the Report stage of discussing it at a
more appropriate time than this hour of the evening.

Amendment agreed to.

Mr. HOLMES: I beg to move at the end of the paragraph beginning "8 and 9 Geo. 5, c. 40," to insert the words and Sub-section (4) of Section 6 of Rules applicable to Cases I and II of Rules applicable to Schedule D".
This is a very small Amendment, but it is rather important to the traders of the country who have machinery. The particular Section referred to is the one which lays down the Rule under which depreciation is allowed for machinery used in business, but Sub-section (4) appears to be in practice very unfair upon traders. Where a man makes profits and claims his depreciation each year, the thing goes through in a satisfactory way, but if he makes a loss in any year, so that there is no need to claim for depreciation, he is allowed to carry that forward year by year until he makes a profit, and then the accumulated depreciation is deducted before he has to pay Income Tax. This Sub-section, however, says that he must go each year to his local surveyor and must agree the allowance for depreciation, and have it carried forward in an official way. If that is not done, he loses his right, when his year of profit comes, to claim the accumulated amount for depreciation. I probably have had more experience in seeing surveyors of taxes than anyone here, and during the last few years they have been so short-handed that they wanted to put aside every bit of work that was unnecessary. If it appeared on the face of it that a company was not liable, let us say, to Excess Profits Duty, they did not want to work it out so as to see it exactly, but left it over until a year when a profit was made. It was the same with regard to machinery, and I can give a case in my personal experience where the matter was left over for five years. When the company concerned reached a year in which profits were made, the Surveyor of Taxes had changed and the new Surveyor proposed to disallow the back depreciation and quoted this Section in support of his contention. I was able to show from a file of correspondence that his predecessor had agreed to the matter being left in abeyance, and in this case the point was amicably settled. But there is
no fairness in the Inland Revenue authorities taking advantage of the situation in any case. I ask the Chancellor to leave out that particular Section which makes it necessary for a taxpayer to claim each year, even though he is not liable for Income Tax, the amount of depreciation which should be carried forward to next year.

Mr. CHAMBERLAIN: The points put by the hon. Member are well worthy of consideration, and I shall be glad to consider them if he will allow me time to see what is the effect of the views and the cases he has put before me. The actual words he has put on the Paper would produce results quite different from what he desires. I do not quite understand how they would touch his case. They certainly would do something which I am sure he would not want, and which would be inconvenient to the taxpayer. But I should be glad if he will allow me to consider the matter between now and the Report stage in the light of what he has said.

Amendment, by leave, withdrawn.

Further Amendment made: In paragraph beginning "9 and 10 Geo. 5, c. 32" leave out the words "to five, eleven".—[Mr. Chamberlain.]

Schedule, as amended, agreed to.

Motion made, and Question, "That the Chairman do report Progress; and ask leave to sit again," put, and agreed to.—[Mr. Chamberlain.]

Committee report Progress; to sit again To-morrow.

The remaining Orders were read, and postponed.

It being after half-past Eleven of the clock upon Wednesday evening, Mr. DEPUTY-SPEAKBR adjourned the House, without Question put, pursuant to the Standing Order,

Adjourned at Ten minutes before Twelve o'clock.